U.S. stock markets ended Tuesday’s trading session with mixed performances as investors balanced concerns about geopolitical risks against a strong showing by tech stocks. Nasdaq Composite outperformed the indices, buoyed by optimism surrounding Nvidia (NVDA) ahead of its earnings report.
Index Performance
- Dow Jones Industrial Average: Closed down 0.3%, reversing earlier steep losses but remaining in negative territory.
- S&P 500: Recovered from an intraday dip below its election breakout level, closing up 0.4%.
- Nasdaq Composite: Climbed over 1%, bolstered by a nearly 5% surge in Nvidia stock.
Key Drivers
1. Nvidia Boosts Nasdaq
Nvidia, a major player in artificial intelligence and chip manufacturing, saw its stock rise nearly 5% after receiving bullish ratings from analysts. Excitement comes despite recent concerns about overheating issues in its flagship AI chips. Nvidia’s gains provided a much-needed boost to tech-heavy Nasdaq, which has struggled in recent sessions.
2. Geopolitical Tensions Weigh on Sentiment
Global markets were jolted by news that Russian President Vladimir Putin signed a revised nuclear doctrine broadening scenarios for the use of atomic weapons. This escalation comes in the wake of Ukraine’s first use of U.S.-supplied long-range missiles against Russian border regions.
Safe-haven assets, including gold and U.S. Treasury bonds, saw a surge in demand:
- Gold: Rose nearly 1%, trading above $2,600 per ounce.
- 10-Year Treasury Yield: Declined 4 basis points to approximately 4.38%.
3. Bitcoin Nears All-Time Highs
Bitcoin reached $92,500 per token, shy of its record high of $93,400. Cryptocurrency has been buoyed by optimism surrounding President-elect Donald Trump’s crypto-friendly policies, including the proposed creation of a national bitcoin stockpile.
Sector Highlights
- Technology: Nvidia’s gains spilled over to tech giants, helping the sector recover from recent downturns.
- Consumer Goods: Walmart raised concerns over potential price increases linked to Trump’s proposed tariffs, despite its shares rising 4% after posting better-than-expected earnings.
- Cryptocurrency: Shares of Bakkt Holdings (BKKT) rose 3% on news of potential acquisition talks with Trump Media & Technology Group.
Market Outlook
Analysts remain cautiously optimistic about the market’s trajectory. Goldman Sachs projected the S&P 500 could reach 6,500 by the end of 2025, attributing gains to narrowing outperformance by “Magnificent Seven” tech stocks.
However, geopolitical risks and uncertainties surrounding trade policies could introduce volatility. Trump’s proposed tariffs, including a 60% levy on Chinese imports, have sparked concerns across industries, with firms like Amer Sports warning of potential price hikes for consumer goods.
Conclusion
Tuesday’s market session reflected competing forces at play: optimism driven by tech earnings and broader economic recovery was tempered by escalating geopolitical risks and trade uncertainties. As investors await Nvidia’s earnings and further clarity on U.S. trade policies, the market remains poised for both opportunity and volatility in the coming weeks.