By COMFORT OGBONNA
Asian stocks moved mostly sideways on Tuesday while oil prices remained under pressure as investors assessed the impact of threatened U.S. sanctions on Iran and looked ahead to a closely watched earnings report from Nvidia.
Markets had initially braced for a major escalation after the United States warned that countries and companies continuing to do business with Iran could face additional sanctions. However, the expected immediate measures failed to materialize, easing some of the concerns that had built up around the announcement.
The developments left investors balancing geopolitical risks against a range of other market-moving factors, including U.S. Treasury policy, technology-sector valuations and uncertainty over the future path of interest rates.
U.S. Treasury yields retreated from recent highs after reports that the Treasury Department could use funds in its cash account to help finance larger purchases of outstanding government bonds. Such a move could reduce the government’s need to issue additional short-term debt and potentially ease some pressure in the Treasury market.
The technology sector remained in focus as investors prepared for Nvidia’s quarterly results, which are due Wednesday. The chipmaker has become one of the most closely watched companies in global markets because of its central role in supplying processors used to build artificial intelligence systems.
Expectations for the results are exceptionally high. Analysts are looking for quarterly revenue to nearly double to about $92 billion, while full-year earnings guidance is expected to fall between roughly $103 billion and $105 billion.
Investors are not only looking at whether Nvidia can meet those headline numbers but also whether the extraordinary pace of growth can continue.
Market participants are increasingly examining the financial relationships and transactions supporting the rapid expansion of the artificial intelligence industry. Questions about whether some AI-related revenue and investment flows are sustainable could become more important if growth begins to slow.
Across Asia, the broader market showed little direction. An index tracking Asia-Pacific shares outside Japan was down about 0.1%, while Japan’s Nikkei gained 0.3% after reversing earlier losses.
South Korea’s Kospi fell about 0.2%, while China’s CSI300 blue-chip index declined 0.2%. Hong Kong’s Hang Seng Index was down about 0.3%.
Technology sentiment was also affected by developments involving major Asian companies. Alibaba’s planned $10.2 billion share sale, intended in part to support its artificial intelligence ambitions, weighed on sentiment after the shares were offered at a significant discount.
Investors were also disappointed by Samsung Electronics’ plans for returning capital to shareholders, adding further pressure to the region’s technology sector.
U.S. stock futures pointed to a modestly positive opening, with Nasdaq futures rising 0.36% and S&P 500 futures gaining 0.1%. European markets were more mixed, with Euro STOXX 50 futures down 0.2%, while German DAX futures edged up 0.13% and Britain’s FTSE futures were little changed.
Oil prices remained weak after falling more than 2% during the previous session. Brent crude futures were down 0.04% at about $92.13 a barrel, while U.S. crude was up 0.1% at roughly $85.08.
The muted response in oil markets reflected the fact that the latest U.S. sanctions announcement did not immediately disrupt Iranian oil supplies.
The United States had warned other countries to reduce their economic ties with Iran or risk secondary sanctions as part of a broader pressure campaign. Iran responded by promising to retaliate and expressing confidence that major trading partners would resist Washington’s demands.
China’s relationship with Iran is particularly important for markets because China is Iran’s largest trading partner. Analysts said Beijing’s response could become an important factor in determining how effective the U.S. sanctions campaign will be.
The confrontation also raised concerns about the broader relationship between Washington and Beijing. Investors are watching whether the pressure on Iran could complicate efforts by the world’s two largest economies to maintain a fragile trade truce ahead of a planned meeting between their leaders next month.
Despite the limited immediate impact on oil, the sanctions threat provided some support for the U.S. dollar. Concerns about access to the dollar-based financial system could encourage companies and financial institutions to increase their dollar holdings as a precaution.
The dollar rose against the Canadian dollar, trading around 1.3860 Canadian dollars after gaining more than 0.5% during the previous session.
The Canadian currency also remained under pressure after President Donald Trump threatened to raise tariffs on Canadian cars, trucks and automotive parts to 50% beginning Jan. 1. The threat followed the breakdown of trade negotiations between the two countries.
The euro slipped 0.08% to about $1.1656, while the British pound fell 0.04% to around $1.3624.
Investors are also looking toward the Federal Reserve’s annual gathering in Jackson Hole, Wyoming, where Fed Chair Kevin Warsh is scheduled to speak Friday.
Markets are hoping the speech will provide greater clarity about the central bank’s approach to interest rates, particularly as policymakers balance persistent inflation concerns against uncertainty surrounding economic growth and government fiscal policy.
Investors are particularly interested in how long the Federal Reserve may be willing to keep interest rates unchanged while waiting for inflation to move sustainably toward its 2% target.
Gold, another asset that has benefited from uncertainty surrounding currencies and global policy, declined 0.3% to about $4,635.89 an ounce.
In the cryptocurrency market, bitcoin climbed above $80,000 for the first time since mid-May. It was last trading about 2% higher at $80,506.75, adding to a broader recovery in digital assets.
Markets now face several potentially significant catalysts, from Nvidia’s earnings and U.S. interest-rate expectations to developments involving Iran, Canada and global trade.
For investors, the combination of elevated technology valuations, geopolitical tensions and shifting expectations for monetary and fiscal policy is likely to keep markets volatile as the week progresses.
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