Wall Street falls as mounting Russia-Ukraine tensions cause jitters

By Lisa Pauline Mattackal and Purvi Agarwal

(Reuters) – Wall Street’s main indexes fell on Tuesday, as escalating tensions between Russia and Ukraine dented risk appetite globally and sent investors rushing for safe-haven assets.

Russian President Vladimir Putin lowered the threshold for a nuclear strike in response to a broader range of conventional attacks, and Moscow said Ukraine had struck deep inside Russia with U.S.-made long-range missiles.

“We’re nervous because Putin has said if this escalates, he could match the escalation. Markets (around the world) are reflecting this nervousness,” said Kim Forrest, chief investment officer, Bokeh Capital Partners (WA:).

The briefly jumped to its highest since the Nov. 5 U.S. election, at 17.93, before slightly easing to 16.52.

“The combination of Russia ratcheting up its war rhetoric and uncertainty about how the incoming U.S. presidential administration will respond, is a recipe for stock market volatility,” said Gaurav Mallik, chief investment officer, Pallas Capital Advisors.

The resurgence of geopolitical tensions added jitters during a crucial week for Wall Street, as investors await key cabinet appointments for President-elect Donald Trump’s administration, assess the possible path for interest rate cuts and await quarterly earnings from AI giant Nvidia (NASDAQ:).

Nvidia, which reports third-quarter results on Wednesday, gained 2%. Given its weight in the main indexes, its results could offer equities support in a volatile market.

Retail giant Walmart (NYSE:) gained 3.5% to hit a record high after it raised its annual sales and profit forecasts for the third consecutive time.

But most megacap stocks inched lower, with Amazon.com (NASDAQ:) and Tesla (NASDAQ:) losing between 0.4% and 0.8%, respectively, as investors rushed to safe-haven assets including government bonds, gold and the Japanese yen.

such as JPMorgan Chase (NYSE:) and Bank of America lost over 0.6% each, making them the biggest weights on the Dow and the .

At 9:45 a.m. ET, the fell 337.15 points, or 0.78%, to 43,052.45, the S&P 500 lost 23.68 points, or 0.40%, to 5,869.94 and the lost 23.82 points, or 0.13%, to 18,767.98.

The consumer discretionary stocks dragged on the Nasdaq, while the index was down 0.7%.

Most investors have, however, maintained fairly upbeat forecasts for equities – both Goldman Sachs and Morgan Stanley (NYSE:) have forecast the S&P 500 would reach 6,500 by the end of 2025.

The Nasdaq and the S&P 500 closed higher on Monday.

AI server maker Super Micro Computer (NASDAQ:) leapt 22.7% after the company named BDO USA as its auditor and said it has submitted a plan to the Nasdaq to avoid delisting.

Home improvement retailer Lowe’s (NYSE:) lost 4.6% despite forecasting a slower-than-expected drop in annual comparable sales.

Incyte (NASDAQ:) fell 13.7% after the drugmaker paused enrollment in an ongoing early-phase study on its skin condition treatment.

Kansas Fed president Jeffrey Schmid is scheduled to speak later in the day.

Declining issues outnumbered advancers by a 2.65-to-1 ratio on the NYSE and by a 2.01-to-1 ratio on the Nasdaq.

The S&P 500 posted five new 52-week highs and 15 new lows, while the Nasdaq Composite recorded 16 new highs and 122 new lows.