U.S. stock markets were mixed in early dealmaking on Tuesday, as investors returned for a holiday-shortened trading week focused on talks between the U.S. and Russia aimed at ending the war in Ukraine.
By 09:54 ET (14:54 GMT), the benchmark S&P 500 had added 5 points or 0.1%, the tech-heavy Nasdaq Composite had gained 31 points or 0.2%, and the 30-stock Dow Jones Industrial Average had dipped by 60 points or 0.1%.
The main averages on Wall Street were closed on Monday in observance of the Presidents Day holiday.
Global markets provided a strong handover, with stocks in Europe hovering near record high levels, bolstered in particular by defence names. European leaders have said they would bump up military spending and become the main guarantor of Ukraine’s security, with analysts noting signals from the White House that the U.S. may no longer be relied upon to backstop the continent’s defence.
Shares in Hong Kong also climbed to almost three-year highs as traders eyed a rare meeting between Chinese President Xi Jinping and domestic business leaders. Elsewhere, the Reserve Bank of Australia slashed interest rates for the first time in four years, although policymakers flagged that it remains too early to declare victory over inflation and further cuts are not guaranteed.
U.S.-Russia discussions in focus
Officials from the U.S. and Russia are holding crucial negotiations in Saudi Arabia on a potential deal to halt the war in Ukraine.
The discussions mark a possible thawing in relations between Washington and Moscow that have been all but frozen since the onset of the conflict in early 2022. U.S. Secretary of State Marco Rubio, White House national security advisor Mike Waltz, and Middle East envoy Steve Witkoff are representing U.S. President Donald Trump, while Russian Foreign Minister Sergei Lavrov and a Kremlin foreign policy advisor will represent Russian President Vladimir Putin.
However, neither Ukraine nor its European allies were invited to participate in the discussions. Kyiv has stated that no peace deal can be secured on its behalf.
Media reports have suggested that the gathering could serve as a precursor to a face-to-face meeting between Trump and Putin. Trump surprised traditional U.S. allies in Europe last week when he announced that he had spoken with Putin by phone and had ordered his team to kick-start peace talks.
European leaders met in Paris earlier this week to discuss how they would provide a unified response to Trump’s actions. On Tuesday, EU Commissioner Valdis Dombrovskis said that the European Union’s executive branch stands ready to move quickly with proposals to soften budget rules to ease limits on defence spending by member states.
“Increased defence spending in Europe would in our view point not only to higher bond yields but also to wider spreads with German bonds,” said Hubert de Barochez, Senior Markets Economist at Capital Economics. The German 10-year yield, which is commonly viewed as a European benchmark, has moved higher this week as investors assess the implications of more defence expenditures on national budgets in the region.
Intel shares rise
In individual stocks, Intel (NASDAQ: INTC) shares jumped on a Wall Street Journal report that semiconductor giants Broadcom (NASDAQ: AVGO) and Taiwan Semiconductor Manufacturing Co. (TW:2330) were exploring potential deals that would split the U.S. chipmaker in two.
Broadcom has been mulling Intel’s chip design and marketing operations, while TSMC has looked into taking a controlling stake in or all of the company’s chip factories, the WSJ reported.
Intel’s stock price has surged by 18% so far this year. The shares ended their best week in a quarter-century on Friday, buoyed by reports of a possible partnership with TSMC.
Elsewhere, a regional Delta Air Lines (NYSE: DAL) plane flipped upside down upon landing at Toronto Pearson (LON: PSON) Airport on Monday, injuring 18 of the 80 people on board.
Officials said that three of the people on the flight from Minneapolis-St. Paul International Airport had suffered critical injuries and a further 15 were taken immediately to the hospital, Reuters reported. Some of those who had been hospitalized have been released, the news service added. Shares in Delta oscillated around the flatline.
Oil choppy
Brent crude prices were choppy after a drone attack on an oil pipeline in Russia dented supply flows from Kazakhstan.
A senior Russian official claimed that the pipeline was struck by Ukrainian drones and is responsible for pumping around 1% of the global oil supply. The official flagged that the attack may disrupt worldwide crude flows and impact U.S. businesses.
However, the prospect of a Ukraine peace deal limited gains. Analysts have argued that an end to the hostilities could include a loosening of longstanding sanctions on Russia, reopening a raft of new oil supplies.
At 09:57 ET, the Brent futures contract had risen by 0.2% to $75.39 a barrel, while U.S. crude futures (WTI) gained 1.1% to $71.46 per barrel.
