Wall Street saw a mixed session on Tuesday as the Nasdaq rallied, lifted by a surge in Nvidia shares ahead of its upcoming earnings report. Investors appeared to look past the escalating geopolitical tensions between Ukraine and Russia, which briefly unsettled markets after reports of missile strikes in Russia’s border regions. The S&P 500 edged up supported by gains in major technology stocks, while the Dow Jones Industrial Average dipped 50 points amid cautious sentiment. Strong earnings from Walmart also contributed to the optimistic tone, adding to the tech-led resilience in an otherwise volatile market environment.

Key Takeaways:

  • Nasdaq Gains 1% as Tech Stocks Rally: The Nasdaq Composite climbed 1% on Tuesday, closing higher as investors brushed aside geopolitical concerns surrounding the Russia-Ukraine conflict. Nvidia shares surged nearly 5% ahead of its highly anticipated earnings report, while Tesla rose 2%, bringing its month-to-date rally to 38%. Alphabet and Amazon also added more than 1%, contributing to the strength in the tech sector.
  • Dow Dips Despite Broader Market Gains: The Dow Jones Industrial Average slipped 50 points, or 0.1%, to end the day at 34,987. Market sentiment remained cautious as investors monitored rising geopolitical risks, particularly following reports of Ukraine striking a Russian border region with US-made missiles.
  • S&P 500 Edges Up Led by Tech and Consumer Stocks: The S&P 500 gained 0.5%, closing higher at 4,583.62, supported by gains in technology and consumer discretionary sectors. Tesla and Nvidia both helped lift the index.
  • European Markets Decline Amid Russia-Ukraine Tensions: The pan-European Stoxx 600 index dropped 0.45%, marking its lowest point in over three months. Financial stocks led the losses, with banks sliding 1.42%, while travel stocks declined by 1% as the heightened geopolitical tensions weighed on investor sentiment. Germany’s DAX Index fell 130 points, or 0.68%, to close at 18,953. France’s CAC 40 dropped 51 points, or 0.71%, while the UK’s FTSE 100 lost 10.30 points, or 0.13%, to finish at 8,099.02. Meanwhile, the final reading of annual eurozone inflation for October came in at 2%, up from 1.7% in September, confirming preliminary figures. Core inflation, which strips out volatile components like energy, food, alcohol, and tobacco, was recorded at 2.7%. 
  • Asia-Pacific Markets Rise Amid Mixed Sentiment and Chinese Policy Optimism: Asia-Pacific markets ended Tuesday with a mixed but generally positive performance, driven by gains in tech and positive comments from Chinese policymakers. Australia’s S&P/ASX 200 rose 0.89% to close at 8,374, supported by gains in energy and technology sectors. Japan’s Nikkei 225 closed 0.51% higher at 38,414.43, while the Topix gained 0.68% to 2,710.03. South Korea’s Kospi added 0.12%, finishing at 2,471.95. In China, the CSI 300 index climbed 0.67% to end at 3,976.89, while Hong Kong’s Hang Seng Index was up 0.40% during its final hour of trade. 
  • Crude Oil Prices Steady Amid Rising Tensions in Eastern Europe: Crude oil futures remained steady on Tuesday following news of Ukraine launching US-made long-range missiles against a facility in Russia’s Bryansk region. West Texas Intermediate (WTI) crude for December delivery closed at $69.39 per barrel, up 0.33%, while Brent crude for January settled at $73.31 per barrel, edging up by 0.01%. Despite escalating tensions, oil prices showed little movement compared to Monday’s 3% rise, as markets awaited further developments.
  • US Treasury Yields Decline as Investors Seek Safe Havens: Treasury yields fell as investors moved into safe-haven assets amid heightened geopolitical tensions. The yield on the 10-year Treasury slipped by more than 2 basis points to 4.392%, while the yield on the 2-year Treasury declined to 4.282%. In addition to the geopolitical concerns, investors were assessing US housing data, which showed a 6.9% drop in single-family housing starts in October due to disruptions from Hurricanes Helene and Milton. The Cboe Volatility Index (VIX), often referred to as the “fear gauge,” rose around 16 points, reflecting the risk-off sentiment.

FX Today:

  • EUR/USD Holds Firm Amid Rising Geopolitical Risks: The EUR/USD pair closed at 1.0595, remaining largely steady despite a spike in geopolitical tensions between Russia and Ukraine. Investors were cautious, with the 50-period Simple Moving Average (SMA) acting as resistance at 1.0619. The broader outlook remained uncertain, as the pair faced further resistance from the 100-period SMA at 1.0727 and the 200-period SMA at 1.0809. A failure to break above these levels could lead to a retest of the immediate support level at 1.0570. If selling pressure intensifies, EUR/USD might target the 1.0500 level. For a potential bullish reversal, a sustained move above the 50-period SMA is needed, but strong resistance looms at higher levels, limiting near-term upside.
  • GBP/USD Struggles Below Moving Averages Amid Cautious Sentiment: GBP/USD closed at 1.2680, unable to overcome significant resistance levels amid mixed sentiment driven by geopolitical uncertainties. The pair remains capped below the 50-period SMA at 1.2759, with further challenges at the 100-period and 200-period SMAs, positioned at 1.2856 and 1.2947, respectively. Immediate support is located at 1.2650, and a failure to hold above this level could expose the pair to further declines, targeting 1.2600. To turn the sentiment bullish, a close above 1.2759 is essential, though the presence of multiple resistance levels above keeps the bias cautious.
  • USD/CHF Retreats as Safe-Haven Demand Rises: The USD/CHF pair closed at 0.8823, pulling back as investors sought the Swiss Franc amid heightened geopolitical concerns. The pair tested resistance near 0.8840 but failed to maintain gains, reflecting risk-averse sentiment. The 50-period SMA at 0.8823 now serves as a critical pivot point, while the 100-period and 200-period SMAs at 0.8748 and 0.8682 provide support below. If USD/CHF manages to hold above the 50-period SMA, a potential move towards 0.8900 could be on the cards. However, failure to sustain above 0.8823 might lead to a deeper pullback, particularly if the geopolitical tensions escalate further.
  • AUD/USD Attempts Recovery but Faces Resistance from Moving Averages: AUD/USD closed at 0.6532, showing modest recovery attempts but continuing to struggle below key resistance levels. The pair managed to test the 50-period SMA at 0.6528, but stronger resistance remains at the 100-period SMA at 0.6556 and the 200-period SMA at 0.6633, capping any significant gains. If bearish sentiment returns, the immediate support level is near 0.6500. A drop below this level would expose AUD/USD to further downside risks, targeting 0.6450. On the other hand, a successful break above the 50-period SMA might encourage buying interest, though a broader recovery would require a move past both the 100 and 200-period SMAs.
  • Gold Rebounds Amid Safe-Haven Flows but Faces Challenges: Gold prices closed at $2,633.90 on Tuesday, rebounding strongly as investors sought safety amid rising geopolitical tensions between Russia and Ukraine. The precious metal broke above the 50-period SMA at $2,615.08, signalling initial bullish momentum. However, further gains may be limited by resistance at the 100-period SMA at $2,677.75 and the 200-period SMA at $2,678.68. If Gold fails to sustain momentum above $2,615, it could revisit support at this level, with a potential break lower exposing it to $2,580. On the upside, a decisive close above the 100-period SMA at $2,677.75 could signal renewed bullish strength, with the next target around $2,700. 

Market Movers:

  • Walmart Hits Record High After Strong Earnings: Walmart shares jumped 3% to reach a new all-time high of $167.45 after reporting better-than-expected fiscal third-quarter earnings. The retail giant also raised its full-year guidance, driven by strength in e-commerce and increased discretionary spending, particularly in categories outside of groceries. 
  • Super Micro Computer Soars on Auditor Announcement: Super Micro Computer’s stock skyrocketed 31.2% to $112.85 following news that BDO would become its new auditor, replacing Ernst & Young, which stepped down last month. 
  • Lowe’s Falls After Weak Guidance: Lowe’s shares dropped 4.3% to $215.11 despite reporting better-than-expected third-quarter results. The decline was triggered by weaker guidance for 2024, with the company warning of a potential decline in sales amid a challenging macro environment. 
  • Symbotic Surges 27.7% on Strong Revenue Beat: Symbotic’s stock soared 27.7% to $49.35 after the automation technology company reported fiscal fourth-quarter revenue of $576.8 million, beating analysts’ estimates of $470.2 million, according to FactSet. The company also issued strong current-quarter guidance, signaling continued growth momentum in the automation and technology sector.
  • Insmed Rallies Over 10% on Terminated Equity Sale Agreement: Insmed shares jumped 10.4% to $29.57 after the biopharmaceutical company announced it had terminated a $500 million equity sales agreement with Leerink Partners. 
  • Viking Holdings Declines Despite Strong Bookings Report: Viking Holdings shares dipped 0.7% to $16.48, even after the company exceeded Wall Street’s third-quarter earnings expectations. The travel company reported adjusted earnings of $0.89 per share on revenue of $1.68 billion, compared to analysts’ estimates of $0.84 per share on revenue of $1.67 billion, according to FactSet. 

As markets wrapped up the day, investor sentiment was mixed amid rising geopolitical tensions and corporate earnings releases. The Nasdaq led gains with tech giants such as Nvidia and Tesla at the forefront, while the Dow dipped slightly as caution prevailed over the escalating Russia-Ukraine conflict. European markets struggled, driven by a risk-off approach as geopolitical fears heightened, while Asian markets found some support from optimism around Chinese policy developments. Crude oil prices held steady, reflecting the uncertain supply dynamics amid the conflict, while gold rallied as investors sought safety. With Nvidia’s earnings report and further geopolitical developments on the horizon, market participants remain focused on balancing risk amid a volatile global landscape.