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Equity investors stepped cautiously Wednesday ahead of key US data and the release of earnings by tech titan Nvidia that could shine a light on demand for all things artificial intelligence after this year's tech-led markets rally.
While a Federal Reserve interest rate cut next month is baked into prices, traders are also keenly awaiting next week's crucial non-farm payrolls figures, which are seen as key to determining how big the central bank goes.
Traders remain largely upbeat, with August's early rout -- sparked by US recession fears and a Bank of Japan rate hike -- in the rearview mirror and some markets within a whisker of records touched this year thanks to the tech-fuelled rally.
On Tuesday, the US Conference Board’s consumer confidence survey for August beat expectations and came in at its highest level since February.
The news had minimal impact on markets, with all three main indexes on Wall Street ending only slightly higher.
But Ray Attrill, of National Australia Bank, said: "The rebound in stock markets after the July crunch, lower gasoline prices and the heightened prospect of near-term interest rate cuts (reflected in lower mortgage rates) look to have overwhelmed the impact on confidence of softening labour market indicators."
Now attention turns to the release of a series of US indicators, including gross domestic product growth, the Fed's favoured gauge of inflation, jobless claims and personal income, which will provide fresh insight into the state of the world's top economy.
But the headliner is the earnings report from market heavyweight Nvidia, which is due for release after US markets close.
The company has soared around 160 percent this year -- and about 1,000 percent from its low in October 2022 -- on the back of a global race to jump on the AI bandwagon.
Nvidia has seen profits soar thanks to demand for its powerful GPU chips, which have set the industry's pace in pushing new advances in AI.
That has made it a key indicator for the sector, but analysts warned that if it fails to deliver on its earnings, or just doesn't top forecasts, it could spark a sell-off in the sector.
"This is the one that could either lift all boats or sink the entire fleet," said analyst Stephen Innes in his Dark Side Of The Boom newsletter.
"With Nvidia holding a hefty seven percent of the market cap weight, directional bets were scarce -- no one wants to go all-in when the 800-pound gorilla is about to shake the room.
"Nvidia's influence is undeniable, making it nearly impossible to take your eyes off it."
After Wall Street's tepid performance, there was little buying inspiration among Asian traders.
Hong Kong, Shanghai, Singapore, Manila and Bangkok dropped, while there were gains in Tokyo, Wellington, Taipei, Mumbai and Jakarta. Sydney and Seoul were barely moved.
London, Frankfurt, and Paris all rose at the start.
Oil prices edged higher after big swings Monday and Tuesday as dealers kept tabs on developments in the Middle East crisis and Libya, where the eastern-based administration said it would close fields under its control and suspend production and exports "until further notice".
- Key figures around 0710 GMT -
Tokyo - Nikkei 225: UP 0.2 percent at 38,371.76 (close)
Hong Kong - Hang Seng Index: DOWN 0.9 percent at 17,715.22
Shanghai - Composite: DOWN 0.4 percent at 2,837.43 (close)
London - FTSE 100: UP 0.2 percent at 8,360.68
Dollar/yen: UP at 144.52 yen from 143.96 yen on Tuesday
Euro/dollar: DOWN at $1.1149 from $1.1185
Pound/dollar: DOWN at $1.3230 from $1.3261
Euro/pound: DOWN at 84.29 pence from 84.34 pence
West Texas Intermediate: UP 0.1 percent at $75.60 per barrel
Brent North Sea Crude: UP 0.1 percent at $79.64 per barrel
New York - Dow: FLAT at 41,250.50 (close)
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