Global stocks edged up on Wednesday as falling oil prices pushed bond yields lower on hopes that the vital Strait of Hormuz could soon reopen, while investors awaited another pivotal earnings report from AI heavyweight Nvidia.
Iran said it had restarted talks with Oman to manage the Strait, as it faces heightened economic pressure from U.S. President Donald Trump in the nearly six-month conflict that has roiled oil markets and stoked global inflationary worries.
The yield on 2-year German bonds dropped over two basis points to a more than one-week low of 2.771%, while that on its U.S. counterpart was steady at 4.199% after falling about 4 basis points on Tuesday.
Investors awaited Nvidia's, opens new tab second-quarter earnings later in the day, with the focus on whether the massive AI spending boom is sustainable and can turn profits that will satisfy markets.
The stock has gained 14% this year, on track for its smallest annual gain in four years, as the AI trade broadens out across geographies and sectors.
Reflecting the caution, European tech stocks, opens new tab slipped 1.3% and futures tracking Wall Street's Nasdaq dipped 0.2% after AI optimism aided gains in the previous session.
Asian tech stocks in Korea, opens new tab and Taiwan (.TWII), opens new tab closed up over 1% each.
Options data hints at a smaller move after earnings compared to previous profit announcements, suggesting Nvidia’s results are becoming somewhat more predictable.
Analysts expect Nvidia to forecast an 82.8% rise in third-quarter sales to $104.20 billion. Adjusted gross margin for the second and third quarters is expected to remain around 75%.
"Strong revision to guidance could potentially reinforce expectations surrounding huge AI capital expenditure and potentially whether it has further to run or not. That's not only likely to benefit Nvidia, but also other chipmakers," Cincotta said.
The dollar index , which measures the U.S. currency against six other units, was at 98.95 but set for a 1% decline for August.
Investors have been grappling with the U.S. Treasury department's efforts to ease pressure on longer-dated bond yields as it expanded its debt buyback program. -Reuters
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