Global Stocks Edge Up as Oil Retreats on Hormuz Hopes, Nvidia Earnings Awaited

Global equity markets edged higher on Wednesday, buoyed by a retreat in oil prices that eased concerns over inflation. Brent crude futures fell for a third consecutive session, sliding more than 2% to $86.45 per barrel, after Iran said it had restarted talks with Oman regarding the management of the Strait of Hormuz. The waterway, which handled a fifth of the world's traded oil before the conflict, has been a key source of supply disruption fears.

The drop in crude helped push short-term bond yields lower, with the yield on two-year German bonds falling to a more than one-week low of 2.771%. The equivalent US yield held steady at 4.199% after declining earlier in the week. Analysts noted that while the easing in oil prices is encouraging, more clarity is needed on actual traffic through the strait to confirm that inflationary pressures are cooling.

MSCI's world stocks index rose 0.1%, with Europe's STOXX 600 hovering near a one-week high. However, caution prevailed ahead of Nvidia's second-quarter earnings report, due later in the day. European tech stocks slipped 1.3%, and Nasdaq futures dipped 0.2%, reflecting investor uncertainty about the sustainability of the AI spending boom. Asian tech shares in Korea and Taiwan closed over 1% higher.

Analysts expect Nvidia to forecast an 82.8% rise in third-quarter sales to $104.20 billion, with adjusted gross margins expected to remain around 75%. A strong revision to guidance could reinforce expectations around AI capital expenditure, potentially benefiting the broader chipmaking sector.

In currency markets, the dollar held steady, with the dollar index at 98.95, set for a 1% decline in August. Traders are awaiting the latest US inflation data, due later Wednesday, ahead of the Federal Reserve's Jackson Hole symposium this weekend. The US Treasury's expanded debt buyback program has shifted pressure from the bond market to the dollar, reviving the 'debasement trade.' This has supported assets like gold, which hovered near a three-month high at $4,632.65 per ounce, and bitcoin, which rose 1% to $79,025.16.