Oil Prices Fall, AI Hopes Rise Amid Escalating Trade Tensions

Global markets ended mostly higher on Wednesday as oil prices fell and investors became more optimistic about the potential of artificial intelligence. However, U.S. futures slipped before the release of crucial inflation and economic growth data, including quarterly earnings from Nvidia, a key player in the AI sector.

The S&P 500 pointed 0.1% lower before the opening bell, while Dow Jones Industrial Average futures fell slightly and Nasdaq futures dropped 0.2%. The tech sector will be under scrutiny on Wednesday as Nvidia reports its quarterly earnings after market close. Investors are eagerly awaiting the results due to AI stocks' extreme volatility over concerns that the technology may not generate sufficient profits.

The inflation update from the U.S. on July consumer spending, also known as personal consumption expenditures, is expected to be released on Wednesday. The Federal Reserve's preferred measure of inflation has remained above 3% since early this year, surpassing the central bank's target. Additionally, the Commerce Department will issue its second estimate of U.S. economic growth during the second quarter of this year.

The trade war between the United States and Canada escalated on Tuesday with retaliatory tariffs imposed by Canada on about $20 billion worth of American goods, including steel, dairy products, appliances, and farm equipment. This move may raise costs for American businesses and consumers ahead of the midterm elections in less than 2½ months.