US stocks recovered from steeper losses in afternoon trading on Tuesday as fears over a nuclear escalation to the Russia-Ukraine war rattled markets, stealing focus from Nvidia (NVDA) earnings and other corporate results.
The Dow Jones Industrial Average (^DJI) was the biggest laggard of the day, down about 0.2% but off of the lows of the session. The benchmark S&P 500 (^GSPC) battled to back to trade above 0.2% after the index fell below its election breakout level earlier in the trading day.
Meanwhile, the tech-heavy Nasdaq Composite (^IXIC) reversed declines to gain around 0.6%, boosted by shares of Nvidia, which rose 2.5% following a series of bullish notes from Wall Street analysts.
The changes mean a large-scale aerial attack could prompt a nuclear response, and any attack by a non-nuclear state that is supported by a nuclear power will be viewed as a joint assault. It comes just days after President Joe Biden gave Ukraine the go-ahead to use US long-range missiles to strike inside Russia. Ukraine carried out its first such aerial attack in a border region on Tuesday morning.
US bond prices climbed alongside gains for gold (GC=F), and other safe-haven assets as the risk-off trade kicked in. Treasury yields — which move inversely to bond prices — fell, with the 10-year benchmark yield (^TNX) down 5 basis points to around 4.37%. Gold jumped nearly 1% to trade above $2,600 an ounce.
Bitcoin (BTC-USD) prices rose around 1.5% to trade above $93,000 a token.
The geopolitical situation blotted out themes such as corporate earnings, President-elect Trump’s cabinet picks, the path of interest rates, and Wall Street’s view of where stocks are headed.
Meanwhile, the countdown is on to Nvidia earnings on Wednesday, seen as a test of the AI trade that has powered gains on Wall Street. The chipmaker’s stock edged higher in premarket trading after getting bruised by a report of overheating issues with its flagship new AI product.
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Goldman Sachs sees S&P 500 hitting 6,500 in 2025 amid ‘narrowing’ Big Tech outperformance
On Monday night, Goldman Sachs chief US equity strategist David Kostin initiated a 2025 year-end S&P 500 target of 6,500, representing about an 11% gain in the benchmark index from current levels.
His work shows that the combination of Apple (AAPL), Alphabet (GOOGL, GOOG), Microsoft (MSFT), Amazon (AMZN), Meta (META), Tesla (TSLA), and Nvidia (NVDA) outperformed the other 493 stocks in the S&P 500 by 63 percentage points in 2023 and 22 percentage points thus far this year.
In 2024, this was driven by Magnificent Seven earnings outperforming the rest of the index by 30 percentage points. But that margin is projected to fall to just 6 percentage points in 2025, per consensus estimates. This, Kostin believes, will lead to that cohort beating the other 493 stocks by just 7 percentage points in 2025, the narrowest level of outperformance from the Magnificent Seven dating back to 2018.
“The narrowing differential in earnings growth rates should correspond with a narrowing in relative equity returns,” Kostin wrote. “Although the ‘micro’ earnings growth story supports continued ‘Magnificent 7’ outperformance, more ‘macro’ factors such as economic growth and trade policy lean in favor of the S&P 493.”‘
Bitcoin inches towards near all-time highs, hovers at $92,500
Bitcoin (BTC-USD) jumped to trade near $92,500 per token on Tuesday as the token inched its way closer to all-time highs.
The cryptocurrency has surged since the presidential election on Nov. 5, touching a record north of $93,400 last week.
Bitcoin has been a key component of the “Trump trade” as President-elect Donald Trump has promised crypto-friendly policies, including the creation of a bitcoin national stockpile.
The move higher also comes on the heels of a Financial Times report stating that Trump Media & Technology Group (DJT) is in advanced talks to acquire crypto trading company (BKKT), a tie-up which could further encourage initiatives within the sector.
Bitcoin proxy stock MicroStrategy (MSTR) touched new record highs on Tuesday. The software company added 52,000 tokens to its portfolio over the past week — its largest purchase of the cryptocurrency yet. Year to date, MicroStrategy is up 500%.
Nvidia stock rises on bullish commentary, chip deal ahead of earnings
Nvidia (NVDA) stock rose as much as 2.7% on Tuesday following a series of bullish notes from Wall Street analysts ahead of its earnings report set for Wednesday afternoon.
The company also saw a boost following news that one of its customers, cloud provider Nebius Group (NBIS), would open operations in the US with GPU clusters that will use 35,000 Nvidia chips. That’s about 4% of the volume of Hopper AI chips Wall Street analysts expect Nvidia to have shipped in the October period, Bloomberg data shows.
In a client note this week, Stifel analyst Ruben Roy raised his price target on Nvidia to $180 from $165, while Truist Securities’ William Stein raised his price outlook to $167 from $148.
Roy cited “a diverse set of data points,” including continued high spending on AI infrastructure by hyperscalers and demand for Nvidia’s latest Blackwell AI chips.
“We believe that NVDA is well positioned in markets that combine to yield an overall TAM of more than $100 billion exiting 2025 and a longer-term opportunity funnel that could approach $1 trillion.”
KeyBanc analysts took a more cautious outlook, lowering their outlook for Nvidia for the January quarter, citing a squeeze on demand in China for Nvidia H20 chips.
“We believe H20 demand in China is getting pushed out as there is increased pressure among China hyperscalers to use domestic AI solutions,” they wrote in a note Tuesday.
They also stated fears that Blackwell chips could cannibalize Nvidia’s older-generation Hopper chips. “Regarding H200, we are hearing that some demand is getting pushed out given the availability of Blackwell (B200).”
Today at 4:58 PM UTC
Trump to nominate Howard Lutnik as next commerce secretary: Reports
Lutnik, the co-chair of Trump’s transition team, is also chairman and chief executive of investment firm Cantor Fitzgerald.
The role has been highly anticipated, as whoever is in charge will be responsible for leading the department that will implement the wide-sweeping tariffs Trump has promised.
The president-elect has pledged to impose blanket tariffs of at least 10% on all trading partners, including a 60% tariff on Chinese imports. Lutnik has supported Trump’s tariff plan, although he’s acknowledged the rollout will likely raise prices in the short term.
That’s been a concern among economists, who say it’s likely the US could face another inflation resurgence if Trump follows through with his key campaign promises.
Gold futures (GC=F) hovered at a one-week high to trade near $2,630 per ounce on Tuesday as traders assessed the threat of a nuclear escalation in the Russia-Ukraine war.
The precious metal extended its gains from Monday as investors flocked to the asset traditionally seen as a safe haven during times of geopolitical uncertainty.
On Tuesday, Russian President Vladimir Putin signed a revised nuclear doctrine, which formally lowered the threshold for Russia’s use of its nuclear weapons. The move followed a decision by the Biden administration to allow Ukraine’s use of long-range US-made missiles to strike deep into Russia.
“Geopolitical risks have reemerged, driving demand for gold and solidifying its role as a reliable hedging asset,” Ahmad Assiri, research strategist at foreign exchange broker Pepperstone, said in a note on Tuesday.
Gold had been on a tear up until the US elections on Nov. 5. It has since fallen as the US dollar (DX-Y.NYB) strengthened. Still, the precious metal is up about 27% year to date, beating the S&P 500’s (^GSPC) gain of 23% over the same period as central banks have boosted their gold reserves.
Walmart (WMT), the world’s biggest retailer, posted fiscal third quarter results that easily beat Wall Street expectations as inflation-weary shoppers continue to search for value. The stock popped over 3%.
Sales of $169.59 billion topped analyst estimates for $167.5 billion. Adjusted earnings per share eclipsed estimates by $0.05 at $0.58.
The company also raised its guidance for fiscal year 2025 for the third time.
Lowe’s (LOW) stock fell nearly 5% shortly after the opening bell as investors homed in on continued negative sales growth despite results that beat the Street’s estimates.
The home improvement retailer posted revenue of $20.17 billion, compared to estimates of $19.93 billion. Adjusted earnings per share came in at $2.89, versus the $2.82 expected.
Same-store sales fell 1.1%, less than the 2.7% decline anticipated. The company alluded to ongoing softness in the “DIY bigger-ticker discretionary demand,” which was offset by hurricane-related recovery efforts following Hurricanes Helene and Milton and positive same-store sales in its Pro business and online.
Housing starts fall in October amid elevated mortgage rates
Housing starts fell in October, pressured by a drop in single-family construction.
Data from the Census Bureau showed housing starts dropped 3.1% in October to an annual rate of 1.311 million units. Meanwhile, single-family housing starts slipped 6.9% to a seasonally adjusted annual pace of 970,000 units, unchanged from a year ago.
The decline came as mortgage rates have been climbing, with the average 30-year fixed loan hovering around 6.7%. Rates on a home loan tend to follow US Treasury yields, which have been rising since mid-September partly due to investor anticipation of Trump’s victory and his proposed policies around taxes and tariffs.
Higher rates also likely discouraged builders from filing building permits during the month.
Contract permits for single family dwellings fell to a pace of 968,000, a 0.5% drop from September’s revised figure of 963,000.
“Major storms likely stalled the beginnings of some residential projects, causing a steep decline in construction in the southeast,” Jeffrey Roach, chief economist at LPL Financial, wrote after the release.
“Both housing starts and building permits declined in October as several homebuilders appeared to hold back the start of projects until after the election. However, more recent surveys showed a rebound in homebuilder confidence.”
Today at 2:35 PM UTC
Stocks fall on Russia-Ukraine war escalation
US stocks fell at the open on Tuesday after President Vladimir Putin signed a revised nuclear doctrine, allowing Russia to expand its use of atomic weapons in a possible escalation of the Russia-Ukraine war.
The Dow Jones Industrial Average (^DJI) led the declines, down about 0.8%. The benchmark S&P 500 (^GSPC) slid roughly 0.5% to fall below its election breakout level, while the tech-heavy Nasdaq Composite (^IXIC) also dropped around 0.5% on the heels of a mixed day for the major gauges.
Today at 1:31 PM UTC
Super Micro Computer soars over 25% after filing plan to avoid Nasdaq delisting
Super Micro Computer (SMCI), an AI server maker and Nvidia (NVDA) partner, soared over 25% premarket Tuesday. The sprint higher came after the company on Monday submitted a filing with the Securities and Exchange Commission saying that it’s supplied a compliance plan with the Nasdaq to avoid delisting.
Also boosting the stock, Super Micro said it’s hired a new auditor, BDO, after its prior accountant, Ernst & Young, resigned in late October.
The company was in hot water with the Nasdaq after delaying both its annual and quarterly filings to the SEC following a scathing report from short-selling firm Hindenburg Research. The report shed light on potential accounting malpractices, violations of export controls, and shady relationships between top executives and Super Micro partners. The company is reportedly being investigated by the Department of Justice.
Even with this week’s surge, shares have tumbled roughly 56% over the past three months. After gaining as much as 300% earlier this year, SMCI stock is now down over 20% in 2024.
Walmart (WMT) has worked very diligently behind the scenes the past two years to be a major player online. The retailer has expanded its assortment online and has fine-tuned its “buy online, pick up in store” functionality — among other initiatives.
These results are eye-popping for two reasons: 1) Walmart isn’t exactly a startup; 2) the competition online is as fierce as ever.
I am talking to Walmart CFO John David Rainey live at 9:15 a.m. ET on Yahoo Finance. Rest assured, we will ask him about these online sales numbers!
Today at 10:37 AM UTC
How Goldman sees the Mag 7 trade playing out in 2025
Hat tip to Goldman Sachs’ chief US equity strategist David Kostin for calling out specific stocks in his 2025 outlook piece that just dropped.
So often these year-end works of art from investment bank strategists simply serve up S&P 500 (^GSPC) targets, with various underlying scenarios explained. But usually, no stock predictions.
Kostin is calling out another year of strong performance for the Mag 7 trade, just not as hot as recent years.
Says Kostin:
It’s a good point by Kostin, and comes in the face of all these Mag 7 stocks trading at rich multiples on hearty outlooks for profit growth. There is only so far you can push a stock price using reasonable future financial assumptions!
You can tool around with Mag 7 valuations on Yahoo Finance’s new stock comparison tool here.
Today at 10:28 AM UTC
If there is one thing that could trip Nvidia bulls up
As I noted on Monday in our blog, expectations on Nvidia’s (NVDA) earnings and outlook are very robust … to say the very least.
If there is one thing that could trip up the bullish trade the morning after earnings, it’s Nvidia’s guidance. While it will likely be above consensus, it may not be above consensus enough given the dynamics around Blackwell chip demand. Nvidia could opt to go stronger with guidance when it reports three months from now or so.
Important point on this from Stifel analyst Ruben Roy this morning in a note:
