Awaiting Nvidia's earnings report, the semiconductor sector led gains in the Asia-Pacific market; South Korean stocks closed up 0.97%; oil prices fell for the third consecutive day; and the bond market strengthened.

Asian-Pacific stocks rose on Wednesday, led by the semiconductor sector, as investors held their breath awaiting Nvidia's earnings report to provide direction for the artificial intelligence market. Meanwhile, oil prices fell for the third consecutive day, easing geopolitical risks boosted the bond market, and overall market sentiment leaned towards cautious optimism.

On Wednesday, the MSCI Asia Pacific index rose 0.9%, with Samsung Electronics and SK Hynix contributing the most significant gains. The Nikkei 225 closed up 0.6% at 66,262.16 points, the Topix index closed up 0.4% at 4,111.02 points, and the South Korean KOSPI index closed up 0.97% at 6,808.21 points.

Three key events will dominate trading this week. Nvidia's earnings report will provide a crucial signal as to whether the AI sector can regain momentum; Federal Reserve Chairman Warsh's first major speech at the Jackson Hole symposium on Friday will set the tone for the interest rate path; and the US PCE data released later on Wednesday will test whether inflation remains sticky.

The drop in oil prices injected additional positive factors into the market. Iran and Oman began talks on a "temporary framework" for resuming shipping in the Strait of Hormuz, causing Brent crude to fall 1.7% to around $87 a barrel, bringing its weekly decline to approximately 8%. Potential easing of inflationary pressures also boosted the bond market.

The Nikkei 225 index closed up 0.6% at 66,262.16 points, the Topix index closed up 0.4% at 4,111.02 points, and the Seoul Composite Index closed up 0.97% at 6,808.21 points.European stocks were slightly higher in pre-market trading, but U.S. stock index futures fell slightly by 0.1%, reflecting overall cautious sentiment among investors.The US dollar index rose slightly by 0.1%.The yield on the 10-year U.S. Treasury note rose 1 basis point to 4.64%.The yield on Japan's 10-year government bonds fell 1.5 basis points to 2.875%. The yield on Japan's 40-year government bonds declined 2.0 basis points to 4.130%.Gold fell 0.4% to $4,640 an ounce.Brent crude fell 1.7% to about $87 a barrel, bringing its weekly decline to about 8%.Bitcoin is hovering around $79,000.

Semiconductors led the gains, and most Asia-Pacific indices rose.

Previously, AI trading sentiment had been under pressure, with investors skeptical about whether tech giants' massive investments in artificial intelligence would yield commensurate returns. On Tuesday, Wall Street chip stocks rallied ahead of the curve, with Nvidia ending a seven-day losing streak, as investors made forward-looking positioning based on earnings results.

Analysts expect Nvidia's revenue last quarter to nearly double year-over-year, a figure exceeding the combined annual revenue of any of its competitors. "Nvidia is currently operating at full capacity and is moving in the right direction at every turn," said Mark Malek of Siebert Financial. "We expect good news, but everyone is just as eager."

However, market sentiment is not entirely without concerns. Mark Cranfield, a strategist at Bloomberg Markets Live, pointed out that with Nvidia earnings season approaching, the VIX volatility index is near its lowest level this year, indicating underlying volatility risks beneath the calm surface; the VIX is more likely to rise than fall. European stocks were slightly bullish in pre-market trading, but US stock index futures fell slightly by 0.1%, reflecting overall investor caution.

Oil prices fell for the third consecutive day, while the bond market strengthened.

Brent crude oil fell for the third consecutive trading day, with the weekly decline widening to approximately 8%. The trigger for this drop was the "temporary framework" of talks between Iran and Oman regarding shipping in the Strait of Hormuz, indicating a easing of geopolitical tensions and a subsequent decline in market expectations of supply disruptions.

Lower oil prices further dampened inflation expectations, driving the bond market to continue its upward trend. U.S. Treasuries maintained their gains from Tuesday. Japanese government bonds also strengthened, with the yield on 40-year Japanese government bonds falling 2.0 basis points to 4.130%, and New Zealand government bonds also recorded gains.

Australia, however, moved in the opposite direction. Inflation data reinforced market bets on interest rate hikes, causing early gains to narrow and eventually turn negative.

In a research report, Capital.com senior analyst Kyle Rodda noted, "While a mountain of event risks has cast a shadow over the market, easing geopolitical risks and the resulting drop in oil prices have been enough to offset market anxieties."

PCE data and the Jackson Hole speech will be the next focus.

The pullback in oil prices and the strength in the semiconductor sector have provided support for the current market, but two key risks still need to be digested. Later on Wednesday, the Federal Reserve's preferred inflation gauge—the Personal Consumption Expenditures (PCE) price index—will be released, providing new readings on inflation trends, which the market will use to assess the scope for a shift in the Fed's monetary policy.

On Friday, all eyes will be on the Jackson Hole Economic Symposium. Federal Reserve Chairman Warsh will deliver his first major public speech since taking office, and the market will closely watch his latest remarks on the path of interest rates.

In other markets, gold fell 0.4% to $4,640 an ounce, while Bitcoin hovered around $79,000.

European Central Bank Executive Board member Isabel Schnabel stated that the ECB still needs to raise interest rates further given the upside risks to inflation, but the euro weakened slightly. The Bloomberg Dollar Index rose slightly by 0.1%.

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