Global stocks edged higher in choppy trading on Tuesday as markets awaited further appointments to the incoming White House administration, while oil prices eased as tensions rose between Russia and the United States over Ukraine.
Investors are eyeing President-elect Donald Trump’s pick for Treasury secretary, with the pool widening to include Apollo Global Management Chief Executive Marc Rowan and former Federal Reserve Governor Kevin Warsh.
Markets are positioning for potential tariffs and tax cuts from the incoming Trump administration that could lead to higher inflation and to fewer interest rate cuts by the Federal Reserve. The yield on benchmark U.S. 10-year notes fell 4.1 basis points to 4.373%.
“I think it’s all the unknown; we’ve had the big unknown, which is how the election was going to go, now that’s known. But the next set of questions is what’s going to happen with Congress and with the White House,” said George Young, portfolio manager at Villere & Co in New Orleans.
“You can have less regulation and with it the possibility of more mergers and acquisition. The only thing that’s kind of a fly in the ointment is the bond market.”
Benchmark S&P 500 and the Nasdaq were trading higher with gains in technology stocks outweighing losses in materials, energy and healthcare equities. Artificial intelligence chipmaker Nvidia is scheduled to report earnings on Wednesday.
The Dow Jones Industrial Average fell 0.40% to 43,217.01, the S&P 500 rose 0.03% to 5,895.43 and the Nasdaq Composite rose 0.38% to 18,863.40.
President Vladimir Putin on Tuesday lowered the threshold for a nuclear strike in response to a broader range of conventional attacks. He approved the change after two U.S. officials and a source familiar with the decision said that U.S. President Joe Biden’s administration allowed Ukraine to use U.S.-made weapons to strike deep into Russia.
Europe’s main stock index fell to a three-month low, as investors shifted from risky assets to safe havens amid heightened geopolitical tensions following Russia’s warning on its updated nuclear doctrine.
The pan-European STOXX 600 dropped to as low as 495.55, it lowest since early August. It was last down 0.7%. MSCI’s gauge of stocks across the globe was up slightly 0.15% to 846.83.
“The market’s movement appears to be driven by this morning’s news about changes to Russia’s nuclear doctrine,” said Michael Weidner, co-head of global fixed income at Lazard Asset Management.
Oil prices dipped, with Brent crude futures down 0.12% to $73.20 a barrel, while U.S. West Texas Intermediate crude futures at $69.08 a barrel, down 0.14%.
The Swiss franc rose around 0.20% against the euro, while the dollar index - which tracks the U.S. currency against six peers - was down 0.02% to 106.20. Gold was last up 0.43% at $2,623.48 per ounce after hitting a one-week high.
Stocks were side-swiped on Friday after a week of irksome inflation readings, hot retail updates and Federal Reserve boss Jerome Powell’s equivocation on future easing.
There was also trepidation, however, ahead of chip giant Nvidia latest earnings report on Wednesday - as the world’s biggest company by market value and artificial intelligence bellwether faces another test of the near 800% stock boom over the past year.
The chip designer, which powered 20% of the S&P 500’s return over the past year, is expected to drive nearly 25% of its EPS growth in the third quarter, according to BofA Global Research. Nvidia’s shares were down 1.5% after a report said its new AI chips were overheating in servers.
“While Nvidia is the last of the Magnificent Seven to report, you’ve seen a nice broadening in earnings and attention,” said Carol Schleif, chief investment officer at BMO Family Office. “It’ll be noteworthy, but it doesn’t feel like there’s the same level of impetus around it as there was a quarter or two ago.”
Energy stocks led the S&P, popping 1.02%, with consumer discretionary also rising as Tesla jumped 4.9% following a Bloomberg report that members of President-elect Donald Trump’s transition team were seeking to ease U.S. rules for self-driving cars.
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