Stock futures dipped early Tuesday, influenced by rising geopolitical tensions and investor anticipation of key earnings reports from major retailers and Nvidia. The market’s cautious sentiment followed a stark warning from Russian President Vladimir Putin, who indicated a lowered threshold for nuclear weapon use under Russia’s new doctrine. This doctrine suggests that Russia might resort to nuclear weapons if faced with conventional threats that jeopardize its sovereignty or territorial integrity. Amid these tensions, traders are particularly focused on Walmart’s upcoming earnings report, expected later on Tuesday, which could provide valuable insights into consumer health and spending trends.

European markets declined on Tuesday amid renewed concerns over Russia. Most sectors and major regional bourses saw pullbacks, with the automotive sector dropping 2.1%, while utility stocks edged up by 0.2%. Additionally, the final reading of the annual euro zone inflation showed an increase from September’s 1.7% to a higher rate. Core inflation, which excludes volatile items like food, energy, alcohol, and tobacco, was reported at 2.7%. These developments reflect the market’s cautious stance in response to geopolitical tensions and inflationary pressures.

Asia-Pacific markets experienced gains on Tuesday, buoyed by Tesla’s positive impact on Wall Street the previous night and investor analysis of Chinese financial policymakers’ remarks at an investment summit in Hong Kong. Australia’s S&P/ASX 200 saw a rise of 0.89%, Japan’s Nikkei 225 closed 0.51%, South Korea’s Kospi increased by 0.12%, Hong Kong’s Hang Seng Index advanced 0.40%, and the Topix climbed 0.68%. These movements reflect a cautiously optimistic market sentiment in the region.

Economic Calendar

Earnings Calendar

Notable reports for Tuesday before the bell include AS, ENR, J, LOW, MDT, OCSL, VIK, VIPS, WB, & WMT. After the bell reports include ALC, AZEK, DLB, GBDC, KEYS, LVB, POWL, VREX, & ZTO.

News & Technicals’

Stock futures dipped early Tuesday following a stark warning from Russian President Vladimir Putin to the United States. Putin’s statement, which lowered the threshold for a nuclear strike, came shortly after reports that the Biden administration had permitted Ukraine to launch American missiles deep into Russia. According to Russia’s new doctrine, a nuclear strike would be considered if Russia or its ally Belarus faced aggression involving conventional weapons that posed a critical threat to their sovereignty or territorial integrity. The doctrine also stated that any aggression against Russia or its allies by a non-nuclear state, supported by a nuclear state, would be viewed as a joint attack.

Lowe’s exceeded third-quarter earnings and revenue expectations on Tuesday and raised its outlook, although it still anticipates a decline in full-year sales compared to the previous year. Meanwhile, its competitor Home Depot has observed that customers are postponing major projects despite the Federal Reserve’s interest rate cuts. In August, Home Depot also lowered its full-year forecast, citing anticipated weak demand for home improvement in the latter half of the year due to high interest rates. These trends highlight the ongoing challenges in the home improvement sector amid fluctuating economic conditions.

Super Micro announced on Monday that it has appointed BDO as its independent auditor. Following this news, the company’s stock, which had significantly declined since its peak in March, surged by 37% in extended trading, continuing its upward momentum from earlier in the day. Additionally, Super Micro confirmed that it will remain listed on Nasdaq, subject to the exchange’s review of its compliance plan. This development marks a positive turn for the company amid its recent challenges.

Investors are trying to focus on the WMT earnings this morning but rising geopolitical tensions and the threat on nuclear weapons use by Russia is obviously tempering bullish spirits.  Of course, the highly anticipated NVDA earnings on Wednesday could quickly tip the scales of market sentiment the bulls or the bears depending on the results.  That said, plan your risk carefully to avoid overtrading due to the likely volatile price action these news events may create.

Trade Wisely,

Doug