Nvidia and Tesla lead market gains as tensions between Russia and Ukraine add volatility concerns
On Tuesday, the Nasdaq Composite climbed 1.04 percent to close at 18,987.47, fuelled by gains in Nvidia shares.
The S&P 500 also advanced, rising 0.4 percent to end at 5,916.98, while the Dow Jones Industrial Average dipped 120.66 points, or 0.28 percent, to settle at 43,268.94.
CNBC reported that investors appeared to look past escalating geopolitical tensions between Ukraine and Russia.
Technology stocks led the gains. Nvidia shares increased nearly 5 percent ahead of its highly anticipated earnings report on Wednesday.
Walmart added 3 percent after exceeding earnings expectations and raising its outlook, citing strong discretionary spending.
Tesla gained 2 percent, extending its month-to-date rally to 38 percent, which is poised to be its best month since January 2023. Alphabet and Amazon also recorded increases of more than 1 percent each.
Keith Lerner, co-chief investment officer at Truist, commented on the market's resilience, saying, “The underlying trend for the market is positive. The geopolitical stuff — that’s certainly a risk — but you’re seeing some modest selling. I’m not seeing panic. It’s more of a digestion of the recent gains.”
Tensions between Ukraine and Russia escalated overnight when Russian President Vladimir Putin warned the US that the threshold for using nuclear weapons had lowered. This followed President Joe Biden’s approval for Ukraine to strike inside Russia using US-provided weapons.
The situation intensified after Ukraine reportedly struck Russia’s Bryansk border region with US-made missiles, targeting an ammunition warehouse. The New York Times confirmed the incident, citing US and Ukrainian officials.
Gaurav Mallik, chief investment officer at Pallas Capital Advisors, highlighted the risks these developments pose to markets.
“Rising geopolitical tensions has been and continues to be a risk for markets. The combination of Russia ratcheting up its war rhetoric and uncertainty about how the incoming US presidential administration will respond, is a recipe for stock market volatility,” he stated.
In response to these developments, investors moved towards safe-haven assets. Treasury prices rose, lowering yields, while gold futures also gained.
The CBOE Volatility Index, known as Wall Street’s “fear gauge,” spiked to around 16, reflecting the market’s unease.
