GLOBAL MARKETS-Stocks get AI boost; investors on tenterhooks over Mideast peace talks

Global stocks rose on Wednesday, driven by robust earnings and renewed technology enthusiasm, while hopes for progress in US-Iran negotiations and Wall Street's record highs also contributed to the market's upward trend.

World ​stocks rose on Wednesday after robust earnings and renewed enthusiasm for technology shares ‌pushed ​Wall Street to record highs the previous day, while hopes for progress on opening the Strait of Hormuz pressured bond yields.

Wall Street looked to open slightly higher. Nasdaq futures rose 0.2%, while S&P 500 futures added 0.5% after the benchmark index hit all-time highs on Tuesday. European shares inched up as investors awaited signs ‌of progress in the U.S.-Iran negotiations.

The pan-European STOXX 600 index was last up 0.3%. U.S. President Donald Trump said his administration had "very good discussions" with Iran during all-day negotiations, fuelling hopes the five-month conflict could be nearing an end.

Drugmaker Novo Nordisk, one of Europe's biggest companies by market value, was down 4.2% after disappointing sales of its Wegovy weight-loss pill overshadowed a strong second-quarter earnings beat. HSBC shares fell nearly 3% a day after its results as investors ‌digested analysts' reaction to the figures.

Fresh evidence of heavy spending on AI infrastructure helped lift Japan's Nikkei 3.7% to its highest since July 23, while South Korea's market continued its volatile run, closing 3.8% higher. MSCI's ‌broadest index of world shares rose 0.4%.

Despite the upbeat mood, chipmaker AMD fell 7% in premarket trading after dropping 8.8% in after-hours deals, as results that beat analysts' estimates failed to meet investors' lofty expectations. AI and satellite company SpaceX was down 10% in premarket trading on worries heavy capital spending was eating up all its cash flow.

That has been a recurring concern for all AI stocks given the vast cost of compute power, with borrowing costs for the sector continuing to rise. "SpaceX continues to execute strongly operationally, but its ambitious investment ⁠program means additional ​capital will almost certainly be required over the medium to ⁠longer term," said Chris Weston, head of research at broker Pepperstone.

BONDS FIRM Brent crude rose more than $1, or 1.26%, to $80.34 a barrel, a long way from its July peak of $102, while U.S. crude was up 14 cents to $76.24, after reports of attacks on a Saudi ⁠Arabian vessel in the Red Sea.

Sentiment was supported by Qatar saying mediators were making progress in efforts to end the U.S.-Iran war, though details were lacking. John Oh, an energy economist at CBA, said flows in the Strait of Hormuz were proving ​more resilient than first thought, perhaps reaching 40% to 45% of pre-war levels last week, based on ship tracking numbers.

"We estimate that traffic flows only need to return to 50% to 60% of ⁠pre-war levels to assert oversupply conditions in global oil markets," he wrote in a note, adding that helped to explain why Brent oil futures had dipped into the $70s. That backdrop provided some relief from inflation fears and boosted bonds globally, with 10-year Treasury yields now at 4.627%, down ⁠from ​last week's high of 4.747%.

The next round of U.S. economic data, including Friday's jobs report and next week's inflation readings, will be closely watched by the Federal Reserve, said James Rossiter, head of global economics at TD Securities. If the Fed shifted from holding rates steady to a tightening cycle, "markets would respond vigorously", Rossiter said.

Markets also lowered the probability of a September Fed rate hike to 57% from 67%. Fed Bank of Kansas ⁠City President Jeff Schmid used a speech on Tuesday to call for tighter policy to help bring inflation back to the central bank's 2% target.

The euro firmed 0.1% to $1.15406, just below its recent six-week high ⁠of $1.1559. The dollar edged up to 157.61 yen, with the ⁠threat of intervention still hanging over the market. U.S. Treasury Secretary Scott Bessent said he was sure Bank of Japan Governor Kazuo Ueda would "do what is best" for Japan's economy, which markets took as encouragement to raise interest rates further.

Japan and the U.S. launched a rare joint yen-buying intervention last week and pledged further action if ‌necessary to support the currency. In commodity markets, ‌the drop in yields helped non-interest-paying gold up 2.7% to $4,185 an ounce.