• Asian shares are cautious as investors await Nvidia's earnings results, with the company's shares seeing a 4.9% increase overnight.
• Amid this anticipation, Nasdaq futures rose by 0.2%, while Bitcoin broke above $94,000 for the first time, fueled by expectations of a crypto-friendly Trump administration.
• Investors are also closely watching geopolitical tensions, such as Ukraine's use of U.S. missiles against Russia, and Trump's pick for Treasury secretary.
• Commodity markets saw slight increases, with oil prices and gold climbing, as the market remains cautious ahead of major company earnings reports.

Asian shares exhibited caution on Wednesday, as investors eagerly awaited the earnings results from Nvidia, the world's most valuable company. The anticipation was high, with the risk of disappointment looming large. The dollar, on the other hand, was seen to be retracting some of its recent significant gains. Nvidia, a leading player in the tech sector's shift to AI, was set to report its third-quarter results. The company's shares had already seen a 4.9% increase overnight, and options suggested a potential 9% swing in either direction for the $3.6 trillion stock.

Global Market Movements Amid Nvidia Anticipation

In the meantime, Nasdaq futures rose by 0.2% on top of a 1% jump overnight. MSCI's broadest index of Asia-Pacific shares outside Japan remained flat, while Tokyo's Nikkei slipped by 0.3%. Bitcoin, the leading cryptocurrency, was last held at $91,914, having broken above $94,000 for the first time overnight. This surge was fueled by expectations that the incoming administration of U.S. President-elect Donald Trump would be crypto-friendly.

In China, the central bank held the benchmark lending rates steady, as widely expected. China's blue chips fell by 0.2%, while Hong Kong's Hang Seng index edged up by 0.1%. Joshua Meyers, executive director at JPMorgan, noted that Nvidia was the key topic on everyone's mind. He stated, Big-picture, a nice beat seems widely anticipated tomorrow. He also expressed concerns about the ebullient expectations for FY26, which have been a recurring topic of conversation.

Geopolitical Tensions and Market Reactions

Investors were also rattled by Ukraine's use of U.S. missiles to strike Russia, with Russia lowering the threshold for a possible nuclear strike. However, those fears seemed to have abated slightly. Investors were also closely watching Trump's pick for Treasury secretary as he assembled his governing team. CNN reported that Trump could announce the decision as soon as Wednesday.

Safe-haven currencies such as the Japanese yen and the Swiss franc gained briefly, as did Treasuries. Benchmark 10-year note yields were last up 1 bp at 4.3903%, having fallen 4 basis points, still some distance away from a five-month top of 4.505%. The yen held at 154.96 per dollar, having hit a one-week high of 153.28 per dollar overnight. The U.S. dollar held onto the overnight losses at 106.19, off from its recent one-year top of 107.07.

Commodity Market Updates

Oil prices rose slightly on Wednesday, building onto the small gains overnight. U.S. West Texas Intermediate crude futures rose 0.2% to $69.53 a barrel, having ended Tuesday just 0.3% higher. Gold climbed for a third straight session, up 0.2% to $2,637.95 per ounce.

In the past, similar events have occurred where the anticipation of a major company's earnings results has led to cautious trading in the stock market. For instance, in 2018, the market was on edge ahead of Apple's earnings report, with investors anxious about the potential impact of the U.S.-China trade war on the tech giant's profits. Similarly, in 2020, the market was cautious ahead of Amazon's earnings report, amid concerns about the impact of the COVID-19 pandemic on the company's operations.