U.S. stocks could open on a tentative note on Wednesday amid simmering geopolitical tensions. Futures of all three major indices were marginally up as investors weighed escalating tensions between Russia and Ukraine, and earnings from AI bellwether Nvidia Corp. NVDA.

U.S. equity markets have had a mixed week so far, with the Dow Jones facing pressure even as the S&P 500 and Nasdaq witnessed sideway movements.

In premarket trading on Wednesday, the SPDR S&P 500 ETF Trust SPY rose 0.13% to $591.05 and the Invesco QQQ ETF QQQ gained 0.10% to $503.96, according to Benzinga Pro data.

Cues From Last Session:

Markets had a second consecutive mixed session, with the Dow Jones closing lower by 0.3% while the S&P 500 edged up. The Nasdaq gained over 1% in the run-up to Nvidia’s earnings.

Crude oil prices continued to gain as Russia-Ukraine tensions escalated.

This geopolitical anxiety rubbed off on treasury yields as well, which edged up.

On the economic data front, housing starts in the U.S. declined by 3.1% to 1.311 million in October versus a revised 1.353 million in the previous month. U.S. building permits declined by 0.6% to an annual rate of 1.416 million in October.

Most sectors on the S&P 500 closed on a positive note, with energy, communication services, and consumer discretionary stocks recording the biggest gains on Monday.

However, industrial stocks bucked the overall market trend, closing the session lower.

Insights From Analysts:

Wedbush’s Dan Ives expressed upbeat sentiment about Nvidia’s earnings, saying that the AI giant could deliver earnings beat and raise guidance as well.

“We expect a drop the mic performance from Nvidia tomorrow night as Godfather of AI Jensen & Co. are the only game in town with $1 trillion of AI Cap-Ex on the way with Nvidia’s GPUs the new oil and gold in this world.”

While there is optimism among analysts about Nvidia and other AI stocks, the European Central Bank expressed caution about the possibility of an “AI bubble.”

“This concentration among a few large firms raises concerns over the possibility of an AI-related asset price bubble,” the ECB said in its latest Financial Stability Review, underscoring the increasing dependence of the equity markets on select companies.

This could also be a cause of concern for equity markets beyond the U.S., noted the ECB.

“Also, in a context of deeply integrated global equity markets, it points to the risk of adverse global spillovers, should earnings expectations for these firms be disappointed.”

Ryan Detrick, chief market strategist at Carson Group, on the other hand, remained optimistic about equity markets.

“Stocks historically do better in years 1 and 2 of a President who was re-elected vs a new President in office.”