US stock futures were subdued on Wednesday as investors prepared for Nvidia’s closely watched quarterly earnings and fresh inflation data, while signs of diplomatic progress in the Middle East pushed oil prices sharply lower.
Sentiment was also shaped by an escalating trade dispute between the US and Canada, with Ottawa announcing retaliatory tariffs on hundreds of American products.
By 02:59 ET, or 06:59 GMT, Dow futures were up 42 points, equivalent to 0.1%, while S&P 500 futures were broadly unchanged. Nasdaq 100 futures slipped 25 points, or 0.1%.
US futures steady after Wall Street gains
The major US indices advanced during the previous session, helped by gains in artificial intelligence-related stocks ahead of Nvidia’s results.
Oil prices falling below $90 a barrel and a rally in US government bonds also supported risk sentiment as investors responded to signs of possible diplomatic progress in the Middle East.
However, weaker-than-expected results from Dick’s Sporting Goods weighed on consumer discretionary shares and limited the broader advance.
Economic figures were also softer than anticipated, with data covering consumer expectations and July new home sales disappointing forecasts.
Nvidia earnings put AI spending in focus
Attention is now firmly on Nvidia (NASDAQ:NVDA), which is due to report fiscal second-quarter results after the US closing bell.
The semiconductor company has become one of the most important indicators of global artificial intelligence investment, with demand for its advanced processors closely tied to spending on data centres and AI infrastructure.
According to LSEG figures cited by Reuters, Nvidia’s quarterly revenue is expected to double from the previous year to $92.18 billion, largely driven by strong data-centre demand. That would represent the company’s fastest revenue growth in seven quarters.
Investors will also be looking for information about the transition among Nvidia customers from its Blackwell generation of processors to the newer Vera Rubin architecture.
Questions remain over whether the enormous spending programmes undertaken by Nvidia’s largest technology customers can be sustained, particularly after several major companies recently highlighted pressure on free cash flow.
Management’s comments on customer spending and future demand could therefore have significant implications for the broader AI investment narrative.
PCE inflation data could shape Fed expectations
Investors are also awaiting the Commerce Department’s July personal consumption expenditures price index, which is due before Wednesday’s opening bell.
Core PCE inflation is expected to increase 0.2% month on month, accelerating from 0.1% previously. On an annual basis, core inflation is forecast to remain unchanged from June at 3.3%.
The PCE index, particularly its underlying core measure, is closely followed by Federal Reserve policymakers when assessing inflation and the outlook for interest rates.
Concerns have increased that higher energy prices stemming from the Middle East conflict could create more persistent inflation and potentially force the Fed to tighten monetary policy further.
Markets have recently reduced expectations for a September rate increase, although Boston Fed President Susan Collins said this week that without more sustained progress on inflation, tighter policy would soon be “appropriate.”
Deutsche Bank analysts noted that 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.”
Iran and Oman reportedly agree temporary Hormuz route
Energy markets remain highly sensitive to developments surrounding the Strait of Hormuz, where tanker traffic has declined sharply since the conflict began.
Shipping companies have been reluctant to send vessels through the waterway because of the risk of attacks. Preliminary Kpler figures cited by CNBC indicated that only five commodity vessels passed through the strait on Tuesday, compared with a 10-day moving average of 15.
Before the war began in late February, approximately one-fifth of global oil and liquefied natural gas supplies passed through the Strait of Hormuz.
Al Jazeera reported that a senior Iranian official said Iran and Oman had agreed to establish a temporary route through the strait following diplomatic discussions in Tehran.
However, the official reportedly said a complete reopening would not take place until the US fulfilled commitments contained in a framework ceasefire agreement signed in June.
Separately, Russia’s RIA Novosti reported that the US and Iran had reached a new ceasefire agreement that could be announced within days, citing Iranian and Pakistani sources. Investing.com said it was unable to immediately verify the report.
The developments have contributed to a sharp fall in Brent crude futures. However, Vital Knowledge analysts cautioned that with the possibility of renewed conflict always “just around the corner,” oil prices may not return to their pre-war levels.
“[A] geopolitical risk factor will be permanently embedded in the price,” they said.
Canada announces retaliatory tariffs on US products
Trade tensions between Canada and the US have also intensified, with Ottawa planning tariffs of up to 50% on approximately 700 American products.
The measures cover roughly $20 billion of annual US imports into Canada and follow Washington’s introduction of 50% duties on a broad range of Canadian exports.
Canada has said its response will involve “dollar-for-dollar” tariffs matching the US measures.
According to a Canadian government statement cited by Reuters, the counter-tariffs are scheduled to take effect on September 8.
The US duties came into force on Saturday after negotiations between the two countries failed to produce an agreement, prompting increasingly tense exchanges between Washington and Ottawa.