The US stock market meandered through a subdued session on Wednesday after a closely watched inflation report came in slightly hotter than forecast, reinforcing fears that the Federal Reserve may need to keep interest rates higher for longer. The data, which showed consumer prices rising marginally more than expected last month, put a damper on investor sentiment and left major indices mixed.
In Australia, the futures market is pointing to a soft start for the ASX 200, with the SPI 200 contract down about 0.3 per cent. Traders are bracing for a cautious open after the Wall Street drift, though the focus will quickly shift to a pair of high-profile earnings releases due later in the day.
Nvidia, the bellwether for the artificial intelligence boom, is scheduled to report quarterly results after the US market close on Wednesday. Analysts expect another blockbuster showing from the chipmaker, which has seen its shares more than double this year on surging demand for AI processors. Any disappointment could send shockwaves through global tech stocks.
Closer to home, Qantas is set to release its full-year results on Thursday. The airline has been navigating a recovery in travel demand while also contending with higher fuel costs and lingering reputational issues. Investors will be watching for guidance on margins, capacity, and dividend policy.
The day's macro calendar also includes Australian consumer price data for July, which will provide the Reserve Bank with fresh clues on the pace of disinflation. A stronger-than-expected reading could revive speculation of another rate hike.
The combination of the US inflation hiccup, domestic CPI, and major earnings announcements makes for a potentially volatile session. Market participants are pricing in a 50-50 chance that the RBA will raise rates again by November, though much depends on the data flow between now and then.
Overall, the tone remains cautious. The US inflation surprise, while modest, serves as a reminder that the fight against sticky prices is not yet won. Against that backdrop, the earnings from Nvidia and Qantas will be scrutinised for signals about corporate health and pricing power in an uncertain economic environment.