NEW YORK: The S&P 500 and the tech-heavy Nasdaq edged higher on Tuesday, paring earlier losses as investors assessed Russia’s warning to the United States with a new nuclear doctrine, and awaited quarterly results from AI-heavyweight Nvidia.
Stocks had slid in early trading after Russian President Vladimir Putin lowered the threshold for a nuclear strike in response to a broader range of conventional attacks earlier in the day, and Moscow said Ukraine had struck deep inside Russia with US-made long-range missiles.
All three major indexes opened lower and the benchmark index dropped as much as 0.64%, while the Russell 2000 fell to its lowest since the Nov. 5 US presidential election, as investors rushed to safe-haven assets such as government bonds and gold.
However, stocks pared losses after Russian Foreign Minister Sergei Lavrov said Moscow will do everything possible to prevent the breakout of a nuclear war.
The CBOE Volatility index had briefly jumped to its highest since the Nov. 5 US election, at 17.93, before slightly easing to 15.98.
“We are in a void of nothing in terms of immediate catalysts, so the markets have to find something to focus on...today’s geopolitical news and saber rattling over nuclear tensions... (are) pulling markets lower,” said Jack Janasiewicz, lead portfolio strategist at Natixis Investment Managers Solutions.
The resurgence of geopolitical tensions added jitters during a crucial week for Wall Street, as investors await key cabinet appointments for President-elect Donald Trump’s administration, assess the possible path for interest rate cuts and await quarterly earnings from Nvidia.
Nvidia, which reports third-quarter results on Wednesday, gained 2.7%, boosting the information technology sector that buoyed the benchmark S&P 500. Most megacap stocks such as Apple and Amazon.com also trended higher and lifted the Nasdaq.
Meanwhile, healthcare shares weighed on the Dow. The losses were limited by a 3.6% gain in retail giant Walmart that hit a record high after it raised its annual sales and profit forecasts for the third consecutive time.
At 11:50 a.m. the Dow Jones Industrial Average fell 138.80 points, or 0.32%, to 43,252.18, the S&P 500 gained 9.63 points, or 0.16%, to 5,903.25 and the Nasdaq Composite gained 102.59 points, or 0.55%, to 18,894.34.
The small-cap index was last up 0.2%.
Most investors have maintained fairly upbeat forecasts for equities - both Goldman Sachs and Morgan Stanley have forecast the S&P 500 would reach 6,500 by the end of 2025.
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