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Dow Jones Industrial Average plunged nearly 350 points Tuesday morning after Russian President Vladimir Putin lowered the bar for the use of nuclear weapons. That came just days after President Joe Biden signed off on the use of American-made long-rage missiles by Ukraine.
After the market opened, the Dow was down 343 points, or about 0.7%. S&P 500 and Nasdaq also fell by about 0.4% and 0.3% respectively.
The moves by both Washington and Moscow were considered an escalation of the war between Russia and Ukraine, which is nearing its 1,000th day. Russia’s new nuclear doctrine will now consider aggression from any non-nuclear state (like Ukraine), with the help of a country with nuclear weapons (like the U.S.), a collective attack on Russia.
While the decision was pre-planned, it comes on the heels of Biden’s authorization for Ukraine to use U.S.-supplied Army Tactical Missile Systems, or ATACMS, to strike Russia. Biden made the decision following Russia’s decision to deploy North Korean troops.
Geopolitical turmoil is considered a major threat to global stocks heading into 2025, with escalating conflicts in Europe and the Middle East raising concerns for markets. The CBOE Volatility Index — also known as the VIX, or the “fear index” — jumped almost 6% Tuesday morning, as continued uncertainty tends to drive volatility in markets.
While these types of shocks tend to have little long-lasting impact on equity markets, Wall Street continues to be wary of the far-reaching effects of geopolitics. JPMorgan Chase (JPM-1.54%) CEO Jamie Dimon has repeatedly warned that the current geopolitical environment, including the remilitarization of the world, poses serious threats to security and economic prosperity globally.
“We have been closely monitoring the geopolitical situation for some time, and recent events show that conditions are treacherous and getting worse,” Dimon said in the bank’s third-quarter earnings report last month.
“There is significant human suffering, and the outcome of these situations could have far-reaching effects on both short-term economic outcomes and more importantly on the course of history,” he said.
Last year, Dimon similarly remarked that it was “the most dangerous time the world has seen in decades.”
Super Micro stock soars over 30%
Shares of Super Micro Computer (SMCI-8.95%) surged over 30% on Tuesday morning after the AI hardware company successfully maintained its Nasdaq listing by hiring a new auditor. The move comes several weeks after the server company’s auditor, Ernst & Young, resigned, following months of disagreement over Super Micro Computer’s governance practices and board independence. Moreover, the company submitted a detailed compliance plan to the Nasdaq, outlining its efforts to meet the exchange’s requirements and avoid delisting.
Walmart stock jumps after posting strong earnings
Shares of Walmart (WMT+0.32%) rose on Tuesday after the retail giant reported strong third-quarter earnings. Walmart’s latest results were fueled by in-store shopping, higher demand for buying items online but picking them up in-store, and deliveries. Growth in advertising and e-commerce also helped drive the strong performance.
—Francisco Velasquez contributed to the article
