Asian equities rebound as treasury yields slip; Nvidia earnings and Fed inflation metrics in focus

Asian stocks experienced a mixed day ahead of Nvidia's earnings release, with oil prices sliding lower. US equity-index futures fell as investor caution grew ahead of the artificial intelligence trade results. Oil prices continued their decline, easing inflation concerns. The MSCI Asia Pacific equities gauge remained relatively stable, with Japan and South Korea's benchmarks fluctuating between gains and losses.

Brent crude oil prices dropped by 1.7% to around $87 a barrel, following discussions between Iran and Oman about resuming shipping through the Strait of Hormuz. Lower oil prices contributed to a decrease in 10-year Treasury yields to 4.63% on Tuesday.

Despite the market fluctuations, small- and midcaps managed to outperform larger blue-chip stocks. Gold maintained its gains from a five-day rally, trading around $4,655 an ounce, while Bitcoin hovered near $78,500.

Three key events are expected to shape trading this week: Nvidia's earnings release on Wednesday, the release of the US Personal Consumption Expenditures price index (PCE) on Thursday, and Federal Reserve Chair Kevin Warsh's Jackson Hole speech on Friday. Nvidia's results will provide insight into whether the AI rally can regain momentum, while the PCE gauge and Fed Chair Warsh's speech will offer signals on the future path of interest rates.

The current market uncertainty is tempered by the easing of geopolitical risks and lower oil prices, which have helped offset investor trepidation. Analyst Kyle Rodda from Capital.com noted that although the risk of geopolitical events remains, the reduction in oil prices has alleviated some concerns.

In other markets, the Canadian dollar remained stable after Canadian Prime Minister Mark Carney announced support for businesses affected by the trade dispute with the U.S. The U.S. is considering further trade measures against Canada due to retaliatory tariffs imposed by President Donald Trump. Nvidia's earnings release on Wednesday will be the primary event for equity traders, as strong results could provide a key test for whether the AI boom can sustain the high expectations for technology valuations.

Following the earnings release, attention will shift to the Jackson Hole Symposium, where Warsh will deliver his first major speech as Fed chair, potentially offering greater clarity on his assessment of the economy and monetary policy.