Russia-U.S. tensions hit global markets as Putin lowers the threshold for a nuclear strike

Global stocks fell and investors fled to safe-haven assets connected Tuesday, arsenic planetary markets reacted to escalating tensions betwixt the world's 2 largest atomic powers: Russia and the U.S.

Europe's Stoxx 600 banal scale was down astir 1% astatine 12:23 p.m. London time, hitting 498.56 — its lowest level since August. In the U.S., stock futures tied to the Dow Jones Industrial Average fell 0.5%, S&P futures slid astir 0.2%, while Nasdaq 100 futures lost 0.1%.

The declines travel aft Russian President Vladimir Putin amended Russia's atomic doctrine that outlines the conditions that would punctual Moscow to deploy its atomic arsenal, Russian authorities quality bureau Tass reported Tuesday.

Critically, Russia has present wide expanded the circumstances nether which it volition see atomic retaliation to see "a large-scale motorboat of force aircraft, missiles, and drones targeting Russian territory, their crossing of the Russian border, and an onslaught connected its state Belarus," Tass said.

The imaginable of a imaginable atomic escalation propelled investors into safe-haven markets, with gold prices up 0.8% astatine 11:52 a.m. London time. In currency markets, the Japanese yen roseate 0.7% and 0.36% against the euro and U.S. dollar respectively astatine 12:26 a.m. London time. The Swiss franc, meanwhile, added 0.3% against the euro.

"The crisp driblet successful enslaved yields and USDJPY was of people notable, but I deliberation adjacent much telling is however rapidly it was faded," Wells Fargo Macro Strategist Erik Nelson told CNBC implicit email, successful notation to the U.S. dollar and Japanese yen exchange.

"There is intelligibly inactive a bias to presumption for higher ostentation and sturdy maturation arsenic we get into the last weeks of the year. Market participants apt callback the header hazard from the earlier stages of the Russian-Ukraine warfare and volition apt beryllium inclined to slice immoderate dips successful yields and USDJPY truthful agelong arsenic immoderate indications of escalation stay much verbal successful nature."

While Moscow had signaled an involvement successful updating its atomic doctrine months prior, the amendments are nevertheless being implemented wrong days of a U.S. decision to let Kyiv to usage American-made long-rage missiles successful Russian territory — a cardinal reversal of Washington's argumentation regarding the warfare successful Ukraine.

"The struggle is escalating ... I intelligibly expect to spot immoderate benignant of contiguous reaction, knee-jerk reaction," Tiffany McGhee, CEO and CIO of Pivotal Advisors, told CNBC's "Worldwide Exchange."

She stressed the request to reappraisal the marketplace interaction successful the agelong term, however, noting akin short-lived reactions since Russia's wholescale penetration of its neighbour successful February 2022.

"But successful presumption of longer-term, this is twelvemonth 3 of the struggle and portion initially we saw spikes successful prices ... that's benignant of leveled off," she said.

Oil markets, which person been astir straight affected by the warfare pursuing Western sanctions connected Russian lipid supplies, remained successful antagonistic territory connected Tuesday contempt the heightened anticipation of a confrontation betwixt 2 of the world's largest crude producers.

The Ice Brent contract with January expiry was down 0.37% astatine 12:33 a.m. London time, with front-month December Nymex WTI futures little by 0.74%, some compared with the Monday settlements.