Global Market Outlook: Powell Rally Extends, Nvidia Earnings Eyed

Global markets, particularly in Asia, reacted positively to Federal Reserve Chair Jerome Powell`s recent statements, with decreasing yields and a weakening dollar. However, the Japanese Nikkei index declined due to the yen`s appreciation against the dollar. Oil prices rose amidst concerns about potential supply disruptions stemming from the conflict between Israel and Hezbollah.

Powell`s emphasis on prioritizing a strong labor market over inflation fueled expectations of a significant interest rate cut in September. This has led to a flattening yield curve, with the spread between two-year and ten-year Treasury yields narrowing significantly. Market watchers are closely observing economic indicators, particularly consumer spending data, for signs of a potential recession.

Important economic data releases this week include EU inflation estimates and US durable goods orders. Additionally, Nvidia`s upcoming earnings report is highly anticipated, with analysts predicting the need for strong performance to justify the company`s high valuation.