1. Asian Equity Markets: Opened Mixed Ahead of Nvidia Earnings Release

- Morning Movement: Asia-Pacific stock markets opened mixed on Wednesday morning. This movement came despite major Wall Street indices closing higher overnight, lifted by a recovery in technology stocks after emerging from selling pressure.

- Key Sentiment: Investors are taking a wait-and-see approach ahead of Nvidia's Q2 2026 (2Q26) earnings release later tonight. This report is seen as a crucial test for the sustainability of the global tech stock rally.

2. AI Sector & Nvidia's 2Q26 Earnings Expectations

- AI Valuation Test: Signs of slowing earnings growth at Nvidia risk reigniting market concerns over the high valuations of tech stocks and the sustainability of capital expenditure (capex) on AI infrastructure.

2Q26 Consensus Expectations:

- Adjusted EPS: Projected to reach $2.09.

- Revenue: Expected to reach $92 billion (+96% year-over-year).

- Reporting Restructuring: Starting in 1Q26, Nvidia split its Data Center segment into two main categories: sales to Hyperscalers and AI Clouds, and Industrial and Enterprise (ACIE).

3. Bond & Commodity Markets: US Treasury Yields Plunge

- Decline in Bond Yields: The 10-year US Treasury Note yield fell more than 7 basis points to 4.63%.

- Yield-Pressuring Factors: The drop in yields was driven by a slump in crude oil prices to their lowest level in a week, as well as market calculations over US Treasury Secretary Scott Bessent's decision to expand the allocation of the US Treasury buyback program.

4. US Macroeconomics: PCE Inflation & Personal Spending Data Projected for Tonight

- Headline PCE Price Index (July 2026): Projected to rise +0.1% month-over-month (+3.6% year-over-year), reversing from -0.1% M/M (+3.7% Y/Y) in June.

- Core PCE Price Index (July 2026): Expected to rise +0.2% M/M (+3.3% Y/Y), slightly accelerating from +0.1% M/M (+3.3% Y/Y) in the previous month.

- Personal Income & Spending: Personal Income is expected to grow +0.2% M/M (stable vs. June), while Personal Spending is projected to slow to +0.1% M/M (vs. +0.3% M/M in June).

#dyor 😊