Global markets mixed as all eyes turned to US inflation

Global markets traded on a mixed trend on Tuesday ahead of the release of the US consumer price index (CPI), while military developments in the Middle East continued.

After Qatar said the Oman-Iran talks over the Strait of Hormuz reached an advanced stage on Tuesday, the US military intervened against yet another vessel in the vital waterway, fueling doubts over the prospects for an agreement for lasting peace.

Mohsen Rezaei, secretary of the Iranian Supreme National Security Council, said the strait would not be opened if the US did not accept Tehran’s conditions.

These developments drove up oil prices amid supply concerns, fueling inflationary pressures through energy costs and complicating the future policy roadmaps of central banks.

Meanwhile, US inflation data, which will be released later on Wednesday, is expected to show a slowdown following July’s 3.4% annual and 0.1% monthly inflation rates.

The US inflation data could signal what steps the Fed may take by year-end, while analysts warned that the data could lead to sector- and stock-specific volatility in the markets following its release.

Chicago Fed President Austan Goolsbee said inflation is the biggest problem that the US economy is currently facing.

At the same time, artificial intelligence (AI)-related optimism continued, contributing to risk appetite in the markets amid persisting risks in the Middle East.

The tech sector continued to grow, riding on AI optimism, as US-based Supermicro (SMCI) posted an increase in orders, a recovery in profit margins and strong expectations for next year after the markets closed on Tuesday — the server system developer’s very strong 2027 guidance fueled the optimism.

AI and cloud data center company CoreWeave’s earnings report signaled that demand for AI and cloud services remains strong.

Meanwhile, the US 10-year Treasury yield came in at 4.69%, and the US Dollar Index was up 0.1% at 99.8 on Wednesday.

Gold was trading up 0.8% at $4,401 per ounce, driven by uncertainty over the Fed's next moves and the US dollar remaining below the 100 threshold.

October-delivery Brent crude was up 0.6% at $89.4 a barrel at the same time.

The S&P 500 declined 0.32%, the Nasdaq dropped 0.6%, and the Dow Jones Industrial Average was down 0.34% on Tuesday. American indexes started Wednesday on a positive trend.

Meanwhile, developments in the Middle East and the trend in oil prices drove the mixed trend in European markets on Tuesday.

The rise in bond yields in the region slowed, while the UK’s 10-year bond yield remained near the 5% threshold.

High oil prices drove up the profitability expectations of energy firms, sustaining the buying trend in these stocks.

At the same time, the European Commission said the electricity supply is strained due to drought and low water levels in rivers.

The UK's FTSE 100 dropped 0.17% and France's CAC 40 declined 0.13%, while Italy's FTSE MIB 30 rose 0.08% and Germany's DAX 40 was up 0.26% on Tuesday. European indexes opened Wednesday on a negative trend.

Meanwhile, Asian markets showed a buying trend amid a rise in tech stocks across the region driven by strong earnings, except in Hong Kong.

South Korean tech shares surged, as LG Electronics shares gained 10%, SK Hynix rose 5.4%, and Samsung Electronics was up 6.5%.

Japanese semiconductor shares also gained at the same time, with the shares of Kioxia Holdings and Tokyo Electron rising 4.4% and 2.3%, respectively.

Rising oil prices, uncertainties over the US-Iran deal and inflation data to be released in the US kept investors cautious.

Near Wednesday’s close, Japan’s Nikkei 225 rose 0.8%, South Korea’s Kospi increased 3.5%, and China's Shanghai Composite was up 0.2%, while Hong Kong's Hang Seng fell 1.2%.