8 Key Items Shaping the Stock Market Tuesday
Market volatility jumps, oil prices surge, Target misses, and other headlines are moving stocks this morning.
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These are the early headlines and other items poised to influence the market at the start of trading Tuesday. As we share this collection of market drivers, U.S. equity futures point to a sharp move lower when the stock market opens this morning.
1. Volatility flared up again on Tuesday, as investors ditched stocks and bonds amid worries that a prolonged conflict in the Middle East could drive up inflation. The Cboe Volatility Index, which tracks S&P 500 options contracts and trades under the ticker VIX, jumped by just under 5 basis points to more than 26 in early trading. Any reading of above 20 tends to indicate relatively high volatility. (Barron’s)
As has often been said, the stock market abhors uncertainty and based on comments from President Trump last night, we have a fresh helping of it. We’re referring to the president saying the “campaign” against Iran could go on “far longer” than the initial four- or five-week projection, and that the U.S. will do “whatever it takes.” This fresh layer of uncertainty will keep the market in fearful mood but remember what we said in yesterday’s February Monthly Roundup about fear, greed and investing. Now to watch the Volatility Index…
2. Supertanker costs in the Middle East have hit all-time highs, according to shipping data and industry sources on Tuesday, as the U.S.-Iran conflict intensifies with Tehran attacking ships passing through the Strait of Hormuz. Shipping through the Strait between Iran and Oman, which carries around one-fifth of oil consumed globally as well as large quantities of liquefied natural gas, has ground to a near halt after vessels in the area were hit as Iran retaliated against U.S. and Israeli strikes. (Reuters)
When it comes to potential incremental inflation pressures stemming from the U.S.-Iran conflict the key word remains duration. With that in mind, we’ll want to see what the administration has to say about its plans for Venezuela, especially following reports yesterday the country’s crude exports doubled in February under U.S. oversight. As those numbers are digested, we could see oil prices give back some of their recent catapult higher.
3. Target’s new chief executive, Michael Fiddelke, says he has a plan to pull the retailer out of its prolonged funk. Target reported another sluggish quarter of sales Tuesday, its 13th consecutive quarter of weak or falling sales…. On Tuesday, the company said its comparable sales, those from stores and digital channels operating at least a year, fell 2.5% in the quarter ended Jan. 31, and fell 2.6% for the full year. The number of shoppers buying through Target fell in the quarter, and its profit contracted. (WSJ)
We have long felt that Target (TGT) is lost between the trifecta of Amazon (AMZN) , Walmart (WMT) and Costco (COST) , and the company’s falling comp sales only add to that thinking. Forward EPS guidance for the current quarter from Target also fell short of expectations (flat to up modestly compared to the $1.30 posted in the year-ago quarter vs. the $1.50 market consensus). We’ll listen in on the earnings call for color on the consumer plus what management says about quarter-to-date weather and shopping disruptions.
4. Apple unveiled its new iPhone 17e and a new iPad Air, refreshing its entry-level hardware offerings with updated chips to prepare for the rollout of new artificial-intelligence features later this year. These launches kick off a three-day stretch of announcements for Apple. Anticipation is building for other expected product announcements, such as a MacBook Pro with the newest M5 chips as well as a new MacBook Air. (MarketWatch)
Nice to haves, in our view, but as we discussed last week, we are waiting to see the revamped AI-powered Siri, a potential catalyst to accelerate the iPhone upgrade cycle. Apple’s newest iOS and iPadOS beta software releases last night still show no sign of this new Siri. Let’s see what CEO Tim Cook and crew announce today and tomorrow.
5. US officials are considering caps on the number of AI accelerators Nvidia Corp. can export to any one Chinese company, which would further constrain the chipmaker’s reentry into a crucial market. The Trump administration has talked about limiting Chinese firms to buying 75,000 of Nvidia’s H200 chips each, according to people familiar with the matter. Shipments of Advanced Micro Devices Inc.’s MI325 chips, which have similar capabilities, would also count toward a customer’s cap, the people said. (Bloomberg)
The back and forth with AI accelerator shipments from Nvidia (NVDA) , Advanced Micro Devices (AMD) and others to China has been a bit of a ping-pong match and one that makes it a challenge for revenue expectations. Let’s remember though that during last week’s Nvidia earnings call, the management team shared:
"While small amounts of H200 products for China-based customers were approved by the U.S. government, we have yet to generate any revenue. And we do not know whether any imports will be allowed into China… Consistent with last quarter, we are not assuming any data center compute revenue from China in our outlook."
So, while NVDA shares sell off on this news, any shipments to China that come about should be viewed as incremental revenue. With that in mind, we’ll be watching NVDA shares closely.
6. The U.S. housing supply gap widened further in 2025 while more households were formed, an independent report showed on Tuesday, suggesting that many potential homeowners will remain sidelined from the market. Realtor.com said in its 2026 Housing Supply Gap report the supply deficit widened to an estimated 4.03 million homes last year from 3.80 million in 2024. Approximately 1.41 million households were formed, compared to roughly 999,000 in 2024. (Reuters)
What’s interesting about this is that while all eyes were on developments in Iran, yesterday the Senate voted to advance the bipartisan housing affordability package, which includes the controversial provision aimed at limiting Wall Street’s footprint in the housing market. Meanwhile, S&P Cotality Case-Shiller sees home prices increasing modestly at the national level this year. That sounds like 2%-3% to us, but even that increase amid ongoing inflation pressures likely means a small pool of homebuyers.
7. Economic data today per TipRanks: LMI Logistics Managers Index (February).
8. Companies reporting today per TipRanks: AM – AutoZone (AZO) , Best Buy (BBY) , Target (TGT) , Thor Industries (THO) . PM – Box (BOX) , CrowdStrike (CRWD) , Ross Stores (ROST) .
At the time of publication, TheStreet Pro Portfolio was long NVDA, AMZN and COST.
