4:10pm:
US stocks closed lower as investors awaited retail earnings to gauge consumer resilience amid concerns over a soft landing.
The Nasdaq Composite dropped nearly 1% to close at 15,631 points, while the S&P 500 fell about 0.6% at 4,976, and the Dow Jones Industrial Average declined roughly 0.2% to hit 38,564.
Earnings reports from retailers like Walmart and Home Depot presented a mixed picture, with Home Depot signaling subdued demand amid inflation concerns, while Walmart's upbeat sales outlook boosted investor sentiment.
Attention now turns to Nvidia's earnings on Wednesday with high expectations for the AI-focused chipmaker possibly impacting broader stock performance.
12:05pm: Gold on track for fourth day of gains
US stocks struggled at noon on Tuesday ahead of the release of the latest FOMC meeting minutes and Nvidia’s earnings, both due on Wednesday.
The tech-laden Nasdaq led the losses and was down 1.3% at 15,564 points. The S&P 500 was down 0.7% at 4,968 points and the Dow Jones was down 0.2% at 38,541 points.
IG senior market analyst Axel Rudolph noted that US markets were weaker as traders returned from the long weekend. “The oil price gave back Monday's gains in quiet trading as the gold price remains on track for its fourth consecutive day of gains,” he said.
10:45am: Canadian interest rate cut looms as inflation slows
Inflation in Canada fell more than expected in January, having experienced a slight uptick towards the end of 2023, the national statistics agency revealed.
Last month, inflation slowed to 2.9%, down from 3.4% in December and a significant retraction from peaks of 8.1% in June 2022.
“Overall, price growth is clearly moving in the right direction,” said Desjardins analyst Tiago Figueiredo.
He believes the Bank of Canada will begin lowering interest rates in June because of this and other indicators highlighting that the economy is slowing.
Over the last few years, the central bank hike interest rates from 0.25% to 5%.
9:59am: German office values plummet as country teeters on recession
German offices saw the biggest fall in value across the eurozone, according to economists, with increases in refinancing costs and the switch to online cited as key factors.
Values of office spaces in the European country dropped 40% compared with their early 2022 peak.
It is around three times greater than the fall in values suffered by German offices during the global financial crisis.
Bundesbank, the country's central bank, warned that Germany was on the edge of a recession as it continues to battle against an "ongoing period of weakness".
James McMorrow, a Capital Economics property analyst, said: “The German office market has certainly been through a torrid two years since interest rates began rising.
“Investors have soured on German offices as home-working has pushed up vacancy and dragged down rent growth.”
9:41am: Home Depot shares slide despite 'positive' update
American DIY retailer Home Depot has opened trading around 2% lower after it saw a decline in discretionary consumer spending in 2023, leading to a drop in full-year sales and earnings.
For the full year, comparable sales fell 3.2% to US$152.7 billion, with diluted earnings per share decreasing 9.5% to US$15.11.
For the fourth quarter, comparable sales fell 3.5% year on year to US$34.8 billion.
Mark Crouch, analyst at eToro, said: “2023 was a testing year that found Home Depot still reorientating to the post-Covid landscape, what CEO Ted Decker called a ‘year of moderation’.
“Despite [the share price] reaction, there are positives in today’s update. When Home Depot previously reported, it warned of a potentially rocky road ahead, giving guidance of a 3-4% sales decline for its full-year outlook. While there may still be bumps in its path, conditions have been settling down, with inflation moderating and supply chains normalising.
"The guidance in the latest update is consequently less bearish, forecasting a comparable sales decline of 1% for fiscal 2024, while the company also announced a dividend hike of 7.7%.”
Over in the UK, any possible positives from Home Dept could help improve investor sentiment surrounding Kingfisher, the owner of Screwfix and B&Q.
Kingfisher is the second most shorted London stock, with a net short position of close to 7%.
Shares in the retailer are down around 0.5% on Tuesday.
8:17am: Wall Street loses ground as rate cut grows less likely
Earnings season for US retailers started on a bright note with Walmart poised to open around 5% higher.
However, Wall Street's main indexes are set to open lower, largely caused by dwindling hopes that the US Fed will enact an early rate cut.
Last week's higher-than-expected inflation figures, not only reduced expectations of a rate cut but also halted a strong rally across Wall Street.
Goldman Sachs has joined UBS in raising its year-end targets for the S&P 500, with the bank expecting a 4% jump by December.
8:22am: US markets to open lower as UBS up S&P forecasts
US markets are expected to open lower with the Dow Jones around 140 points lower at under 38,500, while the S&P 500 is set to slip 24 points to around 5,000.
Walmart shares are looking to open around 3% higher after it announced the purchase of smart TV maker Vizio for £1.8 billion.
One key benefit of the deal is it will provide Walmart with a new place in its stores to advertise and market products to customers.
In Walmart's fourth quarter, revenues lifted around 6% to US$173 billion, while underlying profits slipped 12% to US$5.5 billion due to higher-equity investment gains.
Despite Wall Street returning from the extended holiday slightly adrift, investors will have welcomed analysts at UBS lifting their S&P 500 full-year targets.
The Swiss broker now expects the index to close out the year at 5,400, increasing from its previous forecast of 5,150.
Healthcare remains the broker's preferred sector, while it believes the financial sector could benefit from interest rate hikes and increase acquisitons.