Nvidia Earnings Loom as Inflation Fuels Rate Hike Bets

The stock market was subdued on Wednesday ahead of Nvidia's highly anticipated quarterly earnings report. The AI chip giant's results are seen as crucial for determining the sustainability of the tech boom and setting the tone for other tech stocks in the week.

Nvidia lost 0.4% despite strong performances from other megacaps, including Microsoft and Apple, which each rose 0.5%. Jeff Buchbinder, chief equity strategist at LPL Financial, said 'We're clearly still in a period where inflation is sticky and it's temporarily putting upward pressure on interest rates, an important factor in keeping this bull market for stocks going.'

The latest data from the Commerce Department showed annual US inflation increased 3.7% in the 12 months through July, just above the 3.6% expected by analysts. The Federal Reserve is likely to consider this data when making its decision on interest rates.