Markets were driven overnight by a potent combination of AI-driven earnings euphoria and persistent macro headwinds. Nvidia's blowout Q2 earnings — with roughly 70% revenue growth guided for its fiscal year ending January 2028 — ignited a sharp tech-led rally, lifting the Nasdaq +1.57% and S&P 500 +0.72%, while the VIX fell 4.60% to 14.51, signalling a near-term risk-on tilt. Offsetting the optimism, US PCE inflation printed hotter than expected at 3.7% year-on-year (core 3.3%), reinforcing sticky price pressures and keeping Fed rate-cut expectations firmly off the table ahead of Fed Chair Kevin Warsh's scheduled Jackson Hole address on Friday. ECB July minutes confirmed policymakers view a September rate hike as likely absent a material improvement in the inflation outlook, with Middle East energy shocks — specifically Strait of Hormuz shipping concerns — cited as a key upside risk to prices.
For Asia-Pacific markets, the cross-asset read is constructive on tech but cautious on the broader macro backdrop. The AUD firmed +0.22% to 0.7197 against the USD, supported by commodity strength — gold at USD 4,660/oz (+1.35%), WTI crude above USD 83.50/bbl (+1.61%), copper at USD 6.691/lb (+1.46%), and silver surging +3.13% — which provides a tailwind for ASX resources names. However, elevated US Treasury yields (10-year at 4.66%, 30-year at 5.18%), the Bank of Korea's 25bp rate hike to 3.0%, and the RBA's hawkish August minutes — in which the board debated a hike and flagged upside inflation risks — suggest that rate-sensitive ASX sectors such as REITs, healthcare, and consumer staples will remain under pressure. The ASX 200 closed Thursday -0.40% at 9,127.8, and today's session will balance Nvidia-driven IT sector optimism against a broadly hawkish central bank environment.