Markets steadied as easing bond yields helped equities recover, while investors focused on Nvidia earnings for fresh direction on the AI-driven rally. S&P 500 futures climbed 0.3% and Nasdaq 100 futures gained 0.6%, as traders reduced aggressive rate hike expectations following softer UK inflation data. Brent crude slipped back toward $109 per barrel, although geopolitical tensions in the Middle East continued to keep energy markets highly sensitive.
Attention remained firmly on the Strait of Hormuz after Iran’s IRGC Navy confirmed that commercial shipping traffic, including oil tankers and container vessels, continued with coordination and permits in place. ADNOC’s CEO warned that a full Hormuz shutdown would represent the most severe supply disruption on record, while also emphasizing that the United States remains the UAE’s top investment priority. Meanwhile, the UAE urged Iraq to prevent hostile actions launched from its territory following the reported attack on the Barakah nuclear facility.
Technology stocks stayed at the center of global market sentiment ahead of Nvidia’s highly anticipated earnings release. Investors expect revenue growth of around 80%, but the broader focus will be on AI demand sustainability, production scaling, and competitive pressures within the semiconductor industry. Options markets are pricing a potential 5.5% move in Nvidia shares following the report, highlighting the significance of the results for broader risk sentiment.
In Europe, the Stoxx 600 extended gains for a third consecutive session, while UK gilts outperformed after UK CPI slowed to 2.8% year-over-year, below expectations of 3.0%. The softer inflation print encouraged traders to trim expectations for additional Bank of England tightening. However, globally, concerns over inflationary pressures tied to elevated oil prices continued to pressure long-term government bonds, with US 30-year Treasury yields remaining near levels last seen in 2007.
Elsewhere, geopolitical developments remained active as Russia and China deepened strategic cooperation through new partnership agreements, while Pakistan’s interior minister traveled to Tehran for high-level discussions. NATO Secretary General Mark Rutte also stated that future US force adjustments in Europe would occur gradually and in a structured manner.
On the corporate side, Target delivered stronger-than-expected earnings, reporting adjusted EPS of $1.71 versus estimates of $1.43, alongside better revenue and comparable sales growth. The retailer also raised guidance for the higher end of its full-year earnings outlook, providing a positive signal for US consumer resilience despite persistent macroeconomic uncertainty.
By Amir Amidian
Senior Market Analyst | Zylostar
Frequently Asked Questions
Why are markets closely watching Nvidia earnings?
Nvidia has become a key driver of the global AI rally, and investors are looking for signals on future AI demand, production expansion, and competitive pressures within the semiconductor sector.
Why is the Strait of Hormuz important for markets?
The Strait of Hormuz is one of the world’s most critical oil shipping routes. Any disruption could significantly impact global energy supply and push oil prices higher.
Why did UK gilts outperform?
UK inflation slowed more than expected, reducing expectations for further aggressive Bank of England rate hikes and supporting bond prices.
Why are oil prices still elevated despite today’s pullback?
Geopolitical tensions in the Middle East, particularly around Iran and the Strait of Hormuz, continue to create supply concerns for global energy markets.
What is putting pressure on global bonds?
Persistent inflation risks, fueled by elevated energy prices and strong economic data, are keeping long-term government bond yields near multiyear highs.
