Stocks rebounded from a negative open but still closed mixed after rising geopolitical tension sparked an early flight to the relative safety of U.S. Treasuries. A day before Nvidia (NVDA) is set to report its fiscal third-quarter earnings, results from old-school blue chip retailer Walmart (WMT) were in focus.
The yield on the 10-year U.S. Treasury note declined by more than 7 basis points after a report from The Associated Press said that President Vladimir Putin has formally lowered the threshold for Russia's use of nuclear weapons. Putin first announced the revision on September 25. The 10-year yield closed at 4.39%, down 2 basis points from 4.41% on Monday.
The move "follows U.S. President Joe Biden's decision to let Ukraine strike targets inside Russian territory with American-supplied longer-range missiles." According to the AP, "The new doctrine allows for a potential nuclear response by Moscow even to a conventional attack on Russia by any nation that is supported by a nuclear power."
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The Cboe Volatility Index (VIX) – known as the market's "fear gauge" – jumped from 15.58 at Monday's closing bell to as high as 17.93 on Tuesday before settling at 16.13. The VIX, which reached a pre-election intraday peak of 23.42 on October 31, hit four-month lows around 14 last week.
As Bespoke Investment Group co-founder Paul Hickey writes, "Even a small increase, however unlikely, of an escalating conflict can understandably cause investors to become more risk averse." Hickey also notes that "Putin made similar comments over the weekend that supplying Ukraine with long-range missiles would cross a red line."
The Nasdaq Composite bounced hard off its Tuesday low, rallying 1.6% intraday and closing up 1% at 18,987. The S&P 500 bounced hard too, rallying 1.1% intraday to close up 0.4% at 5,917. The Dow Jones Industrial Average also moved up off its intraday low, rallying 0.8% but still shedding 0.3% to close at 43,268.
Nvidia earnings and Blackwell questions
The other big question around Nvidia's after-the-closing-bell event on Wednesday – other than the magnitude of its earnings beat and its guidance raise – is when the artificial intelligence (AI) chipmaker will see a financial bounce from its new Blackwell platform.
Nvidia stock added 4.9% on Tuesday – making it the best Dow Jones stock – and has nearly tripled for the year to date. It remains the world's No. 1 company in terms of market capitalization, ahead of Apple (AAPL) and Microsoft (MSFT).
Expectations are high and rising with Nvidia set to release its fiscal third-quarter financial and operating results and management positioned to share details on Blackwell – including some commentary on a recent report in The Information that suggests the new chips are overheating when installed in high-capacity server racks.
"Supply chain data points, as well as discussions with industry participants, remain skewed positively," writes Stifel analyst Ruben Roy in a note on NVDA, "and we expect another beat/raise scenario." Roy says that "expectations are elevated" and that "our scenario appears to be widely anticipated" – adding that "our conversations suggest that a Blackwell-driven inflection to the upside is more likely an April quarter event than January."
Roy emphasizes that "the timing of expected Blackwell-based configurations has not changed in recent weeks. In aggregate, estimates have been moving higher for fiscal 2026 and fiscal 2027 and we believe that a diverse set of data points support the positive revisions." Concluding this morning's note, Roy reiterated his Buy rating on NVDA and raised his price target from $165 to $180. That new target suggests implied upside from here of about 22%.
Follow along as we track news about the AI chipmaker and its fiscal third-quarter announcement on our Nvidia earnings blog.
Housing starts drop
The main indexes also overcame more soft residential construction data amid their respective intraday rallies. According to the Census Bureau, housing starts declined 3.1% in October from the prior month to a seasonally adjusted annual rate of 1.31 million. Meanwhile, building permits slipped 0.6% to a seasonally adjusted annual rate of 1.42 million.
"Residential construction continues to trend downward, being weighed down by high mortgage rates and a softer job market," says Jeffrey Roach, chief economist for LPL Financial. "However, builders reported a recent uptick in traffic of prospective buyers, bolstering the near-term outlook for housing demand in the next six months."
Walmart jumps after earnings
That positive general outlook on the U.S. consumer is consistent with commentary from Walmart management in the big box retailer's fiscal 2025 third-quarter earnings announcement. WMT stock rose 3% after it beat top- and bottom-line expectations and raised its full-year outlook.
"We had a strong quarter, continuing our momentum," said Walmart CEO Doug McMillon. As Chief Financial Officer John David Rainey explained, "U.S. customers remain resilient, with behaviors largely consistent over the past four to six quarters."
Lowe's Companies (LOW) stock sank 4.6% despite the world's second-largest home improvement retailer's beat-and-raise quarter.
Lowe's management was also broadly positive on the U.S. consumer and home improvement trends, with CEO Marvin Ellison underscoring management's "confidence that we are well-positioned to capitalize on the expected recovery in home improvement" in the company's earnings announcement.
Alphabet (GOOGL) stock ended the day 1.6% higher despite Bloomberg reporting that state attorneys general and top Department of Justice (DOJ) antitrust lawyers have asked a federal judge to force Google to sell Chrome, the world's most popular web browser.
U.S. District Court Judge Amit Mehta ruled three months ago that Google illegally monopolized the online search market.
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