Stocks steady near record peaks as Nvidia earnings loom
MSCI gauge of world stocks near record high
Nvidia earnings, due at U.S. close, weigh on indices
Dollar depressed to 1-year lows by rate cut expectations
Updates prices at 1200 GMT
By Lawrence White and Tom Westbrook
LONDON, Aug 28 (Reuters) -Global stocks held near all-time highs on Wednesday ahead of the release of results from chipmaking market darling Nvidia, while sterling hovered near a 2-1/2-year high as traders bet that Britain would lag the U.S. in cutting interest rates.
MSCI's gauge of all stocks across the globe .MIWD00000PUS gained 0.03% to 831.07, near the record close of 831.34 reached on Aug. 23, as market turmoil earlier in the month fadedamid signs policymakers have begun to tame the worst surge in inflation in 40 years.
Europe's benchmark STOXX index .STOXX climbed 0.4%to a one-month high, boosted by technology stocks ahead of rosy expectations for the Nvidia earnings update later in the day.
Nvidia's NVDA.O market value has ballooned thanks to its dominance of the computing hardware behind artificial intelligence. The stock price is up some 3000% since 2019 and with a market capitalisation of $3.2 trillion, a move in its share price affects the broader market.
Second-quarter revenue will likely have doubled, though even that may disappoint expectations. Options pricing shows traders anticipate a near 10% - or $300 billion - swing in market value, likely the largest earnings move of any company, ever.
The results at the "so-called 'most important company in the world,'" stand between Wall Street and fresh record highs, noted Capital.com analyst Kyle Rodda, and set the tone for the sector.
"The company's revenue and sales guidance is a barometer of AI capex, with inferences to be drawn about the health of the other mega-cap tech names," he said.
S&P 500 .SPX futures ESc1 and Nasdaq100 futures NQc1 edged lower, as investors held back ahead of the crucial earnings report.
Any disappointment in Nvidia's results could hurt megacaps and other semiconductor stocks, which have led 2024's rally on the prospect of AI integration boosting corporate profits.
Shares in Australian gambling company Tabcorp TAH.AH meanwhile wereheaded for their largest fall since 2008, dropping 17% to a four-year low after the company warned compliance and other costs meant it would miss earnings targets.
DOLLAR IN THE DUMPS
Debt and currency markets were steady in the Asia session, though the Australian dollar AUD=D3 briefly touched its highest since January at $0.6813 after monthly inflation data was slightly above market forecasts.
Globally, a weakening U.S. dollar in anticipation of Federal Reserve rate cuts has lifted most other currencies because markets see U.S. short-term rates, currently above 5.25%, as having the furthest to fall.
The greenback held near its lowest in more than a year against a basket of peers, and was last 0.4%higher at 100.98,hovering above a 13-month low of 100.51 hit in the previous session.
Interest rate futures price 100 basis points of U.S. rate cuts this year and last week Fed Chair Jerome Powell endorsed the start of cuts saying "the time has come".
The tone contrasts with caution at the Bank of England, which has helped sterling GBP=D3 become the top-performing G10 currency with a 4.1% gain for the year-to-date.
It hit its highest in more than two years on Tuesday at $1.3269, but eased on Wednesday to $1.3212in European trade. GBP/
"In our view, the BoE is likely to only cut rates once a quarter going forward," Rabobank senior strategist Jane Foley said in a note, against a forecast for four consecutive 25 bp cuts from the Fed from September to January.
Rates markets were steady with 10-year U.S. Treasury yields US10YT=RR at 3.81%, two-year yields US2YT=RR at 3.86% and the gap between the two at its narrowest in nearly three weeks.
Heavy selling drove bitcoin BTC= down 3% on the dollar to $59,972. Gold XAU= prices, under pressure from the dollar's slight recovery, slipped 0.9% to $2501 an ounce.
Oil prices fell nearly 2% on concerns about Chinese demand and risks of a broader slowdown.Brent crude futures LCOc1 traded at $78.27 barrel, while U.S. West Texas Intermediate crude CLc1 futures fell 1.76% to $74.2. O/R
World FX rates YTD http://tmsnrt.rs/2egbfVh
Global asset performance http://tmsnrt.rs/2yaDPgn
Asian stock markets https://tmsnrt.rs/2zpUAr4
Reporting by Tom Westbrook and Lawrence White, Editing by Jacqueline Wong and Bernadette Baum
To read Reuters Markets and Finance news, click on https://www.reuters.com/finance/markets
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