Asian markets experienced a downward trend on Tuesday, defying the positive momentum seen on Wall Street, largely due to escalating concerns related to the ongoing Russia-Ukraine conflict.
U.S. futures showed slight increases, whereas oil prices remained relatively steady.
In a significant development, Ukraine deployed several American-supplied long-range missiles into Russian territory, marking the first such military action in almost three years of conflict.
Concurrently, Russian President Vladimir Putin officially adjusted the threshold for the potential use of nuclear weapons.
Japan’s Nikkei 225 index fell by 0.5%, closing at 38,242.35, following the Finance Ministry’s report that the country experienced a trade deficit for the fourth consecutive month in October.
Despite a 3.1% year-over-year rise in exports, the costs of imports escalated due to a weakened yen and soaring energy prices.
A trade deficit occurs when imports surpass exports in value.
The People’s Bank of China declared its intention to maintain the benchmark lending rates at their current levels after a reduction in the one-year rate to 3.1% last month.
The Hang Seng index in Hong Kong experienced a slight decrease of 0.1%, settling at 19,641.05, while the Shanghai Composite index saw a modest increase of 0.6%, reaching 3,364.54.
Australia’s S&P/ASX 200 experienced a dip of 0.5% to 8,330.70, while South Korea’s Kospi gained 0.7%, finishing at 2,488.83.
In the United States, the S&P 500 index climbed 0.4% to close at 5,916.98, overcoming an earlier decline of 0.7%.
The Nasdaq composite also rebounded from an initial loss of 1% to finish up at 18,987.47, although the Dow Jones Industrial Average dipped 0.3% to 43,268.94.
A substantial 4.9% increase in Nvidia’s stock contributed significantly to the gains across these indices.
The chip manufacturer is set to release its quarterly earnings report later in the week, and investors are responding positively to the ongoing excitement surrounding artificial intelligence technologies, which has propelled Nvidia’s stock up nearly 197% for the year.
Fears regarding the Russia-Ukraine situation led many investors to shift funds into U.S. Treasury bonds, which are considered safe haven investments.
The increased demand for bonds resulted in a drop in yields, with the 10-year Treasury yield declining to 4.39% from 4.41% at the end of the previous session.
Gold prices also increased by 0.6%, recouping some losses experienced after Donald Trump’s election victory in 2016, as investors sought safer assets amidst growing uncertainties.
Walmart shares surged 3% after the retail giant exceeded expectations for profit and revenue, reporting robust growth across various sales channels, including online and brick-and-mortar sales.
The company noted an increase in upper-income customers and revised its annual sales and profit forecasts upward.
Despite outperforming earnings expectations, Lowe’s stock fell by 4.6%. Early reports indicated that the number of new homes started last month was below economists’ forecasts, negatively impacting the market sentiment, with rival Home Depot’s shares slipping by 0.9%.
Meanwhile, major firms are expected to disclose their quarterly results this week, with Target scheduled for Wednesday and Deere & Co. for Thursday.
In early Wednesday trading, the price of benchmark U.S. crude oil decreased by 3 cents to $69.21 per barrel on the New York Mercantile Exchange.
Similarly, Brent crude oil fell by 5 cents, priced at $73.26 per barrel.
In currency markets, the dollar strengthened against the Japanese yen, rising to 155.06 from 154.54.
However, the euro experienced a slight decline, trading at $1.0590 compared to $1.0598 previously.