Stocks rise and oil slips as traders eye Iran threat, Nvidia results

HONG KONG - Stocks rose and oil dipped on Aug 25 as investors assess a US plan for the “economic asphyxiation” of Iran, while tech firms struggled following another down day on Wall Street and ahead of earnings from chip titan Nvidia.

With the war against Tehran now in its sixth month, US Treasury Secretary Scott Bessent said the White House was declaring an “economic D-Day” on the Islamic republic and threatened to hit countries that trade with it.

The threat comes with talks to reopen the Strait of Hormuz stalled and neither side showing any sign of backing down – pushing oil prices up for most of August, which has in turn fanned long-term inflation fears and put pressure on bond markets.

“Around the globe, our objective is to sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone,” Bessent told journalists on Aug 24.

“We are going to hold everyone accountable, and this is economic asphyxiation of this regime,” he said, adding that countries not joining US sanctions would “share” in Iran’s isolation.

US President Donald Trump was making phone calls to world leaders with requests to stop interactions with Tehran, Bessent said.

The Treasury Department said Iran’s digital assets, technology, gold, aviation and shipping sectors would be targeted for sanctions.

Both main contracts fell more than 2 per cent on Aug 24 as Bessent’s comments appeared to suggest the US will hold off military action, but they ticked higher in early Asian trade.

His “increasingly aggressive economic campaign against Iran is designed to squeeze Tehran’s access to the global financial system while keeping the pressure economic rather than allowing the market to immediately price another military escalation”, wrote Stephen Innes, global strategist at Quintex Intel.

“For now, oil appears to have heard the message that way, which is doing Washington the considerable favour of taking some inflation pressure out of the system.”

Can Nvidia deliver?

Equities mostly rose, shrugging off a negative lead from Wall Street.

Tech-rich Seoul reversed early losses to end higher along with Tokyo, Hong Kong, Shanghai, Taipei, Singapore, Sydney and Wellington.

Manila, Mumbai and Bangkok fell.

London and Paris edged up at the open, while Frankfurt was also up as data showed German growth rose faster than previously estimated in the second quarter.

Investors are looking ahead to the much-anticipated release of earnings from Nvidia, which has become a bellwether for the AI boom.

With vast sums lavished on artificial intelligence investment over the past two years, markets are growing increasingly nervous about whether firms can deliver results to match.

And analysts have warned that even forecast-beating figures can sometimes not be enough.

Charu Chanana at Saxo Markets said: “Investors are not simply asking whether Nvidia can deliver another strong quarter. They are asking whether it can deliver enough upside to justify already-high expectations, especially with bond yields elevated.”

Eyes will also be on other tech names’ releases, including Salesforce and Marvell.

Also in focus is this week’s annual gathering of central bankers, economists and finance chiefs in Jackson Hole, Wyoming, where the Federal Reserve’s boss Kevin Warsh is due to speak.

His comments will be parsed for clues about monetary policy with inflation still stubbornly high and after Bessent said the Treasury would buy back more of its own bonds to push down borrowing costs after the 30-year yield surged to a 19-year high.

The Canadian dollar edged slightly higher after retreating against the US dollar on Aug 24 as Trump vowed to double tariffs on vehicles from its neighbour, fanning a trade war.

The US president’s threat comes after the two failed on Aug 21 to reach a deal to avert new 50-per cent US tariffs on select Canadian goods.

The duties took effect on Aug 22, and Ottawa laid out plans for retaliation. AFP