U.S. Stocks Trade Mixed: Nvidia Earnings, PMI Data, and Fed in the Spotlight

U.S. stock index futures and equities declined on Tuesday, with geopolitical tensions heightened by Russia’s President Vladimir Putin’s hard-line comments on nuclear weapons.

Wall Street indexes rose on Monday, recovering some of the losses recorded the previous week, helped by a strong rally by electric vehicle maker Tesla (TSLA).

The S&P 500 index was up 0.4% and the NASDAQ Composite was up 0.6%, while the Dow Jones index was down 0.1%.

Wall Street’s decline from record highs the previous week was attributed to cooling optimism about a second Donald Trump presidency, stronger-than-expected inflation data, and less dovish signals from the Federal Reserve, which raised doubts about how much interest rates may fall in the coming months.

Putin Changes Nuclear Strike Threshold

Russian President Vladimir Putin issued a stark warning to the United States on Tuesday, lowering the threshold for a nuclear strike. This came just days after reports that Joe Biden’s administration authorized Ukraine to use U.S. missiles to target Russia. According to the revised doctrine, Russia may now consider a nuclear strike if it or its ally Belarus faces aggression involving conventional weapons that threaten sovereignty or territorial integrity. This marks a shift from the previous doctrine, which limited nuclear responses to near-nuclear attacks or conventional threats to the state’s existence.

Walmart Releases Its Results

Retail giant Walmart (WMT) is projected to report another solid quarter, with its low prices on essential goods appealing to budget-conscious consumers amid sluggish demand.

According to forecasts compiled by LSEG, Walmart is expected to post nearly a 4% increase in revenue and 5% growth in adjusted operating income.

Lowe’s Companies (NYSE) is also scheduled to release its results this week. However, the most anticipated corporate announcement will come on Wednesday from chipmaking giant Nvidia (NVDA), the world’s most valuable company.

Nvidia Earnings in Focus

Nvidia is considered a bellwether for the demand for artificial intelligence, and its earnings report is expected to set the tone for technology stocks in the coming days.

The company’s shares have nearly tripled in value in 2024, driven by strong demand from the booming AI sector. Nvidia is widely recognized as producing the most advanced AI chips in the market.

Alphabet Faces Antitrust Scrutiny

Alphabet (GOOGL) shares fell in premarket trading after Bloomberg reported that the Justice Department may recommend the tech giant divest its Chrome browser as part of a broader antitrust crackdown.

Super Micro Surges After Key Announcement

Server maker Super Micro Computer (SMCI) surged more than 30% after announcing the appointment of a new auditor and confirming it was on track to file its annual financial reports.

Crude Oil Loses Ground

Crude oil prices fell on Tuesday, giving back some of the strong gains from the previous session as traders assessed potential supply cuts.

On Monday, oil prices had risen by over 3% after Equinor announced it had halted production at its Johan Sverdrup oilfield in Norway, Western Europe’s largest oilfield.

The disruption raised concerns about regional oil supplies, which were compounded by Putin’s nuclear warning and the Biden administration’s decision to authorize Ukraine to strike deeper into Russia using U.S.-made weapons.

While the ongoing war has had limited impact on Russian oil exports, any Ukrainian attacks on oil infrastructure could further pressure crude markets geopolitically.

However, the International Energy Agency’s (IEA) latest monthly forecast suggests that global oil supply will comfortably outpace demand through 2025, thanks to rising production outside the Organization of the Petroleum Exporting Countries (OPEC) and its allies.

U.S. production remains near record highs at over 13 million barrels per day, and President-elect Donald Trump’s announcement of Liberty Energy CEO Chris Wright as the new Secretary of Energy signals a strong commitment to boosting domestic fossil fuel production.