US equity futures were little changed on Wednesday as investors waited for two major market catalysts: Nvidia’s quarterly earnings and the latest reading of the Federal Reserve’s preferred inflation gauge.
At the same time, oil prices extended their decline after reports suggested progress in efforts to ease tensions in the Middle East and improve shipping through the Strait of Hormuz.
Trade tensions also remained in focus after Canada announced retaliatory tariffs on a broad range of US goods.
By 02:59 ET, or 06:59 GMT, Dow futures were up 42 points, equivalent to 0.1%. S&P 500 futures were broadly flat, while Nasdaq 100 futures slipped 25 points, or 0.1%.
Wall Street pauses after gains in AI-related stocks
The main US indices advanced in the previous session, helped by strength in artificial intelligence-related shares ahead of Nvidia’s results.
Lower oil prices and a rally in US government bonds also supported sentiment, with investors responding to signs that diplomatic developments in the Middle East could reduce risks to global energy supplies.
However, disappointing results from Dick’s Sporting Goods weighed on consumer discretionary stocks and limited the broader advance.
Economic data also came in below expectations, including readings on consumer confidence and July new home sales.
Nvidia results could reset expectations for AI spending
Nvidia (NASDAQ:NVDA) is due to release its fiscal second-quarter earnings after the US market close, making the report one of the most closely watched corporate events of the week.
The chipmaker has become a key indicator of the strength of the global artificial intelligence investment cycle, with its processors at the centre of spending on data centres and advanced computing infrastructure.
According to LSEG data cited by Reuters, quarterly revenue is expected to double from a year earlier to $92.18 billion, driven largely by demand from data-centre customers. That would mark Nvidia’s fastest revenue growth in seven quarters.
Investors will also be watching for indications on how quickly customers are moving from Blackwell chips to the company’s newer Vera Rubin processors.
Attention is increasingly turning to whether Nvidia’s largest customers can sustain current levels of AI infrastructure investment after several technology groups recently highlighted pressure on free cash flow.
Any guidance from Nvidia on customer demand, capital expenditure trends and the pace of the hardware transition could therefore influence the wider AI trade well beyond the current quarter.
PCE data could influence September Fed decision
Before the opening bell, investors will also receive the Commerce Department’s July personal consumption expenditures price index.
Core PCE inflation is expected to rise 0.2% month on month, compared with 0.1% previously. On a year-on-year basis, the measure is forecast to remain at 3.3%.
The core PCE index is closely monitored by Federal Reserve policymakers and could play an important role in shaping expectations for the September policy meeting.
Concerns remain that the Middle East conflict could create persistent inflation through higher energy costs, increasing the risk that the Fed may need to tighten policy further.
Markets have reduced expectations for a September rate increase, although Boston Fed President Susan Collins said this week that without more sustained disinflation, tighter policy would soon be “appropriate.”
Deutsche Bank analysts said their economists had “previously pegged her as someone not supporting a 2026 hike, so the comments go to show that a September hike may be very much live for some of the centrists on the FOMC.”
Hormuz reports send oil prices lower
Oil markets continued to react to developments surrounding the Strait of Hormuz, where tanker activity has fallen significantly since the conflict began.
Shipping companies have sharply reduced traffic through the route because of the risk of attacks. Preliminary Kpler data cited by CNBC showed only five commodity vessels passing through the strait on Tuesday, compared with a 10-day moving average of 15.
Before the conflict began in late February, roughly one-fifth of global oil and liquefied natural gas supplies moved through the Strait of Hormuz.
Al Jazeera reported that a senior Iranian official said Iran and Oman had agreed on a temporary shipping route through the strait following talks in Tehran.
However, the official reportedly said the waterway would not fully reopen until the US fulfilled commitments made under a ceasefire framework signed in June.
Separately, Russia’s RIA Novosti reported that Washington and Tehran had agreed to a new ceasefire that could be announced within days, citing Iranian and Pakistani sources. Investing.com said it could not immediately verify the report.
Brent crude futures fell sharply on the developments, although analysts at Vital Knowledge warned that renewed conflict remains possible at any time.
They said the prospect of fighting returning was always “just around the corner.”
“[A] geopolitical risk factor will be permanently embedded in the price,” the analysts added.
Canada escalates tariff response against US
The trade dispute between Canada and the US intensified after Ottawa announced plans to impose tariffs of up to 50% on approximately 700 American products.
The measures will affect about $20 billion worth of annual US imports into Canada and follow the introduction of 50% tariffs by Washington on a wide range of Canadian exports.
Canada has said its response will involve “dollar-for-dollar” tariffs matching the US levies.
According to a government statement cited by Reuters, Canada’s counter-tariffs are due to take effect on September 8.
The latest measures follow the breakdown of trade negotiations between the two countries, with the US tariffs having taken effect on Saturday.
