Asian equities showed limited movement on Wednesday as markets awaited Nvidia's earnings report, while oil prices declined on signs of easing geopolitical tensions in the Strait of Hormuz.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.12% in early trading, tracking modest gains in European and U.S. futures. Japan's Nikkei slipped 0.4%, while South Korea's tech-heavy KOSPI dipped 0.2%. Nasdaq futures fell 0.5%, reflecting cautious sentiment ahead of Nvidia's third-quarter results, expected to show an 82.8% year-over-year increase in sales to $104.20 billion.
Analysts anticipate Nvidia's adjusted gross margin to remain around 75% for the second and third quarters, with the company's earnings likely to reinforce the artificial intelligence trade. Charu Chanana, Chief Investment Strategist at Saxo in Singapore, noted that while Nvidia is expected to meet expectations, the market reaction may hinge on the scale of the beat and the strength of forward guidance.
Oil markets softened as Brent crude futures fell more than 2% to $86.41 per barrel, marking a third consecutive day of declines. The drop followed reports that Iran had restarted talks with Oman regarding the Strait of Hormuz, a critical shipping route that handles roughly one-fifth of the world's traded oil. Iran reiterated that the Strait would remain closed until unspecified conditions were met, but market pricing reflected optimism over a potential interim agreement.
U.S. 10-year Treasury yields edged down 6.5 basis points to 4.634%, contributing to a 1% monthly decline in the dollar index. The U.S. Treasury's expanded debt buyback program has shifted pressure toward longer-dated bonds, fueling demand for alternative assets such as gold and bitcoin. Spot gold held near $4,646.08 per ounce, just below a three-month high, while bitcoin traded 0.6% higher at $78,704.
Analysts at J.P. Morgan highlighted that while no concrete progress had been made on the Iran-Oman negotiations, market pricing suggested growing optimism around a potential interim announcement. The firm added that Nvidia's earnings would likely support the AI trade but may not provide a material near-term boost to the broader semiconductor sector.
Kristina Clifton, Economist at Commonwealth Bank of Australia, cautioned that the Treasury's debt buyback measures would only marginally ease interest costs, as the primary drivers of rising U.S. borrowing expenses—including a growing national debt and concerns over fiscal dominance—remain unresolved.
