Oil prices extended their slide by 3% this morning as Iran and Oman progressed with talks on a temporary shipping corridor through the Strait of Hormuz, alleviating fears of renewed disruption. This development has helped ease tensions, supporting sentiment in Asian equities, which rose for a second day. More permanent solutions are expected to be negotiated over the next 30-60 days. Meanwhile, Brent crude prices are down, and Gold is trading around $4600, slightly lower today but still at elevated levels, as Ray Dalio suggested holding some gold and Bitcoin due to potential debt crises.
Investors are closely watching NVIDIA's earnings report, due after the bell, with focus on whether booming AI spending can sustain rapid growth and if rising memory costs will squeeze margins. The street anticipates around 99% earnings growth year-over-year, 99% revenue growth, and 75% gross margin, marking potentially the fastest growth quarter in over eight quarters. Despite a strong setup, guidance will be crucial, especially given Bloomberg's report that NVIDIA has warned customers about price increases of about 15% due to surging memory chip costs, which could impact customer margins in 2027. OpenAI also announced its new in-house "Jalapeno" branded chips, which it claims outperform NVIDIA's key processors.
The US is weighing penalties against Canada after Ottawa announced dollar-for-dollar retaliation, raising the risk of an escalating tariff war. In other news, US microreactor company Nano Nuclear Energy has signed a partnership with the UAE, the first and only such agreement, to deploy its technology. The UAE, already a pioneer with four commercial nuclear power plants generating 5.6 gigawatts of power (about 20% of the population's needs), is seen as a crucial hub for deploying these microreactors across the Middle East to help go off-grid, power desert data centers, and decarbonize oil and gas fields.
