European shares steady as investors await Nvidia results, oil slips on Hormuz hopes
European shares were little changed as markets braced for Nvidia's earnings and a US inflation report, while oil prices fell on hopes of Strait of Hormuz reopening.
European stock markets opened largely unchanged on Wednesday, with investors holding back ahead of a busy session that includes Nvidia's quarterly earnings and a key US inflation reading.
The pan-European STOXX 600 index edged up 0.06% to 656.87 by mid-morning, with luxury goods stocks leading sectoral gains, rising 1.2%. In contrast, technology shares slipped 1.1% as traders positioned ahead of the chipmaker's results, due later in the day.
Analysts expect Nvidia to guide for an 82.8% jump in third-quarter sales to $104.20 billion, with adjusted gross margins holding near 75% for both the current and upcoming quarters. The report is seen as a key test of whether the artificial-intelligence spending boom can sustain current market valuations.
Meanwhile, oil prices extended their decline for a third straight session, with Brent crude falling more than 2% to around $86 a barrel. The drop came after Iran said it had restarted talks with Oman on managing the Strait of Hormuz, raising hopes that supply flows through the critical waterway could normalise. The energy sector was the worst performer on the STOXX 600, down 1.2%, while lower oil prices helped push bond yields down.
Investors are also looking ahead to a US inflation report due later in the day and a speech by Federal Reserve Chair Kevin Warsh at the Jackson Hole symposium on Friday for fresh signals on the interest-rate path.
"We've got a lot of risk coming up and, while European markets won't be directly impacted by Nvidia's results or Kevin Warsh's speech, they will be indirectly affected," said Kathleen Brooks, research director at XTB.
In Europe, policymakers at the European Central Bank are reportedly ready to raise rates at their September meeting to counter the economic fallout from the Iran conflict, though they are hesitant to signal further tightening beyond that.
Among individual stocks, SAP fell 4.2%, the biggest drag on the STOXX 600, after US software maker Intuit issued a disappointing forecast and UBS downgraded the German company to "neutral".