The futures for major U.S. indices suggest a lower opening on Tuesday, indicating a potential retracement of the upward movement observed in the previous session.
This downward pressure follows rising concerns about mounting tensions between the United States and Russia. President Joe Biden's approval for Ukraine to use U.S.-made long-range missiles on Russian territory has led Russian President Vladimir Putin to adjust the country's nuclear policy accordingly.
Kremlin spokesperson Dmitry Peskov stated that the revised doctrine allows Russia to utilize nuclear weapons if conventional weapons used against the nation or the Republic of Belarus threaten sovereignty or territorial integrity. Additionally, Peskov noted, according to NBC News, that any aggression against Russia by a non-nuclear state, with support or participation from a nuclear state, will be treated as a joint attack.
It's reported that shortly before this update to Russia's nuclear stance, Ukraine employed U.S.-made long-range missiles in a strike on a Russian military site in the Bryansk border area.
On the market front, following a sell-off on Friday, stocks rebounded on Monday. Both the Nasdaq and the S&P 500 posted gains, while the Dow saw a slight dip. Specifically, the Nasdaq rose by 111.69 points, or 0.6%, reaching 18,791.81. The S&P 500 increased by 23.00 points or 0.4%, ending at 5,893.62, whereas the Dow Jones inched down 55.39 points or 0.1%, to settle at 43,389.60.
Monday's rebound may partly stem from bargain hunting as investors sought stocks at lower prices following last week's significant decline. The pullback from record highs last week can be attributed to apprehensions regarding interest rates and the potential effects of President-elect Donald Trump's policies and cabinet picks.
However, buying interest remained tempered as traders awaited quarterly results from Nvidia (NVDA), a key player influencing market movements, scheduled for release after Wednesday's market close.
In U.S. economic updates, the National Association of Home Builders revealed a substantial improvement in homebuilder confidence for November, surpassing expectations. The NAHB/Wells Fargo Housing Market Index rose to 46 in November, following an increase to 43 in October, while economists anticipated a rise to 44. This marks the index's highest point since reaching 51 in April.
Notably, the gold sector experienced a sharp rise, leading to a 4.2% surge in the NYSE Arca Gold Bugs Index, driven by a significant increase in gold prices. Additionally, the NYSE Arca Computer Hardware Index witnessed a 2.8% uptick, reflecting strength in computer hardware stocks. Super Micro Computer (SMCI) spearheaded the sector's growth following a Barron's report indicating the company's plan to avoid delisting from Nasdaq. Other sectors displaying notable strength included natural gas, steel, and oil, whereas airline stocks saw downward movement.
**Commodity and Currency Markets**
Crude oil futures are dipping $0.19 to $68.97 a barrel after rising by $2.14 to $69.16 per barrel in the previous session. Meanwhile, gold futures are increasing $23.20 to $2,637.80 an ounce, following a $44.50 jump to $2,614.60 in the prior session.
In the currency markets, the U.S. dollar is trading at 153.55 yen, down from 154.66 yen at Monday's New York close. Against the euro, the dollar stands at $1.0587, compared to the previous day's $1.0598.
**Asia**
Asian equity markets concluded Tuesday on a positive note amid optimism over potential additional stimulus measures and anticipation of the People's Bank of China's rate review scheduled for Wednesday. Australia's S&P/ASX200 reached an all-time high, with markets also buoyed by a global decrease in bond yields.
China's Shanghai Composite Index advanced 0.7%, closing at 3,346.01, with trading ranging between 3,346.76 and 3,284.13. The Shenzhen Component Index leapt 1.9%, finishing at 10,743.84.
In Japan, the benchmark Nikkei 225 Index rose 0.5%, closing at 38,414.43, with a trading range of 38,560.10 to 38,246.36. Leading gainers included Japan Steel Works, up 11.6%, followed by Fujikura at 7.2%. Ebara Corp. climbed 5.2%, with Nidec Corp. and Panasonic each advancing over 4%.Bandai Namco Holdings, Konica Minolta, and Astellas Pharma each experienced declines exceeding 3%. Meanwhile, Recruit Holdings and Oriental Land Co. saw declines just shy of the 3% mark.
The Hang Seng Index on the Hong Kong Stock Exchange rose by 0.4% compared to its previous close, concluding the day at 19,663.67. The trading session fluctuated between a high of 19,758.57 and a low of 19,522.59.
The Kospi Index of the Korean Stock Exchange marginally advanced by 0.1%, or 2.88 points, closing at 2,471.95, with a trading range between 2,479.39 and 2,465.15.
In Australia, the S&P/ASX200 Index concluded trading at 8,374.00, ascending by 0.9% and marking a new 100-day high. The index traded between 8,300.20 and 8,446.40.
Technology One, a software company, saw its shares soar over 10% following an 18% increase in profits. Sonic Healthcare, Block, and De Grey Mining each rallied by more than 6%, while ALS achieved gains of 5.7%.
Elders experienced a dramatic decline of over 10% after completing an equity raising. Neuren Pharmaceuticals and Pilbara Minerals both fell by more than 5%. Liontown Resources decreased by 4.1%, while Pexa Group dropped by 3.8%.
The NZX 50 on the New Zealand Stock Exchange increased by 0.4%, closing at 12,816.32 in contrast to the prior close of 12,764.65. Trading spanned from 12,746.55 to 12,840.36.
Healthcare firm Pacific Edge led gains with an increase of 4.2%. Agribusiness Scales Corporation and healthcare company Ryman Healthcare each rose by just under 3%, while Meridian Energy and Investore Property appreciated by slightly less than 2%.
Synlait Milk suffered a 5% loss, leading the declines. KMD Brands decreased by 2.3%. Telecommunications company Spark New Zealand, infrastructure firm Infratil, and software company Serko each declined by over 1%.
**Europe**
European markets are under significant selling pressure as of Tuesday, driven by heightened tensions from the Russia-Ukraine conflict and uncertainty surrounding U.S. interest rate policies and the global economic growth outlook.
Russia's statement regarding its revised nuclear doctrine has dampened market sentiment, encouraging investors to retreat from riskier assets. The Kremlin clarified that the new nuclear policy aims to make potential adversaries understand that any attack on Russia would inevitably lead to retaliation.
Investors are also evaluating the latest regional economic reports, including data on eurozone inflation, current account statistics, and Swiss trade information.
The French CAC 40 Index fell by 1.4%, the German DAX Index declined by 1.2%, and the UK's FTSE 100 Index decreased by 0.4%.
In the UK market, Diploma's shares tumbled more than 6.5% due to disappointing earnings and revenue forecasts. Melrose Industries dropped 3.2%, with other companies like IAG, Rolls-Royce Holdings, Informa, Weir Group, Schroders, Entain, B&M European Value Retail, Whitbread, Barclays, Prudential, Associated British Foods, Lloyds Banking Group, Antofagasta, and HSBC Holdings seeing declines between 1% to 3%.
Mulberry Group shares plunged over 6% following a significant first-half loss.
Conversely, Imperial Brands rose 2.5% on robust operating profits reported for the latest quarter, with expectations of continued strong performance.
DCC, BT Group, Endeavour Mining, British Land, Fresnillo, BAE Systems, United Utilities, and AstraZeneca experienced gains ranging from moderate to significant.
In Germany, Siemens dropped by 3.4%, while companies like Infineon, Continental, Deutsche Bank, Brenntag, Daimler Truck Holding, Mercedes-Benz, Volkswagen, Deutsche Post, Beiersdorf, BASF, and Porsche witnessed decreases between 1.4% to 3%. Rheinmetall climbed over 5%, with E.ON and Symrise enjoying modest gains.
In France, Stellantis decreased by more than 4%, with Vivendi falling nearly 3%. Accor, STMicroelectronics, Renault, Kering, ArcelorMittal, Saint-Gobain, LVMH, BNP Paribas, Teleperformance, Societe Generale, TotalEnergies, and Legrand recorded declines from 1.3% to 2.5%.
Economically, Eurostat's final data reveals the consumer price index in the Eurozone advanced 0.3% in October from the previous month, marking the highest increase in six months following a 0.1% reduction in September. Annual inflation accelerated to 2% in October, rising from 1.7% in September. Core consumer prices in the Euro Area surged 2.7% year-on-year in October, according to the data.In September, the eurozone saw an increase in its current account surplus owing to a recovery in primary income, as reported by the European Central Bank. The surplus amounted to €37 billion, showing an increase from the €35 billion recorded in August. Initial projections had anticipated a decrease to €27 billion.
Meanwhile, Switzerland experienced a slight decrease in its foreign trade surplus in October, despite a significant rise in exports, according to the Federal Customs Administration. The trade surplus grew to 5.97 billion Swiss francs, up from September's 4.03 billion Swiss francs.
In terms of volume, exports surged by 11.2% in October, counteracting a 2.3% decline in the previous month. Imports maintained a steady growth rate of 0.7%. In nominal terms, exports and imports increased by 10.2% and 1.8%, respectively.
**U.S. Economic Developments**
The U.S. saw a more significant decrease in new residential construction than anticipated for October, as reported by the Commerce Department on Tuesday. Housing starts fell by 3.1%, reaching an annual rate of 1.311 million, following a 1.9% decrease to a revised rate of 1.353 million in September. Economists had predicted a 1.8% reduction to an annual rate of 1.330 million from the initially reported 1.354 million for the prior month.
Furthermore, the Commerce Department noted a decline in building permits by 0.6% to an annual rate of 1.416 million in October, after a 3.1% drop to a revised rate of 1.425 million in September. Building permits, a leading signal for future housing demand, were expected to see a minimal increase of 0.1% to a rate of 1.430 million from the previously reported 1.428 million.
At 1:10 p.m. ET, Kansas City Federal Reserve President Jeffrey Schmid is scheduled to address the Greater Omaha Chamber regarding the economic and monetary policy outlook.
