Global stock markets generally rose, with the S&P 500 up 0.3%, the Nasdaq 100 up 0.6%, and the Dow Jones Industrial Average up 0.3%. This positive movement was partly attributed to a decline in oil prices and an easing of concerns regarding inflationary pressures. The Nasdaq 100 notably outperformed other major benchmarks, driven by a rebound in chipmakers, halting a seven-day losing streak for the sector ahead of Nvidia Corp.'s crucial earnings report.
Oil prices saw significant drops, with Brent crude settling below $90 and West Texas Intermediate crude falling 4.6% to $81.08 a barrel. This decline was fueled by hopes for a revival of energy flows through the Strait of Hormuz, with Iran and Oman reportedly discussing an interim framework. Additionally, reports of the U.S. returning diplomats to Middle East embassies helped calm sentiment, reducing worries about escalating conflicts and their impact on oil supplies. The fall in oil prices also contributed to lower bond yields, with the yield on 10-year Treasuries declining seven basis points to 4.63%.
Investors are keenly focused on Nvidia's upcoming earnings, which analysts estimate could show nearly doubled revenue last quarter, reaching $92 billion. Analysts like Matt Maley of Miller Tabak emphasize the importance of a strong positive reaction to Nvidia's results, especially given the intense pressure from Wall Street on Fed Chair Kevin Warsh. Mark Malek of Siebert Financial noted that Nvidia is "operating on all cylinders" and that any misstep could present an opportunity for investors. Kenny Polcari of SlateStone Wealth highlighted that investors seek reassurance that AI demand remains robust, hyperscaler spending is not slowing, margins are stable, and guidance justifies the substantial ongoing investment in AI.
