Inflation Sentiment Shifts as Nvidia Reports Strong Earnings

The dollar and U.S. Treasury yields increased on Wednesday after hotter-than-expected inflation figures raised expectations of a potential interest rate hike by the Federal Reserve.

U.S. inflation as measured by the PCE index, the Fed's preferred measure, rose by 0.2% month-on-month in July, above the forecasted 0.1%, and the annual rate increased to 3.7%. Despite this, the probability of a rate hike next month barely budged.

Nvidia reported Q2 revenue and earnings that beat estimates, but its Q3 revenue outlook did not include any data center chip sales from China. The company's gross margin is expected to dip to 74% in Q3 from 75% in Q2.