(Updates prices, adds details)

* World stocks steady, ASML lifts tech

* Soft US inflation keeps rate hike bets in check

* Focus on Warsh, US PPI and earnings

* China growth misses, Brent tops $85/bbl

By Danilo Masoni and Tom Westbrook

MILAN/SINGAPORE, July 15 (Reuters) - World shares steadied

on Wednesday as upbeat earnings from chipmaking equipment maker

ASML revived the AI trade, helping offset concerns about the

fallout from fresh hostilities involving Iran and a surge in oil

prices.

Europe's STOXX 600 index was just below parity by

1142 GMT after rallying the previous day when

softer-than-expected U.S. inflation data cooled concerns about

higher interest rates, pushing the dollar and yields lower.

Tech-heavy markets in the U.S. and Asia fared better.

Nasdaq futures rose 0.5%, alongside a 0.1% gain in

S&P 500 futures, signalling a firmer open on Wall Street

as investors assessed a fresh wave of corporate earnings.

"The divergence between the U.S. and Europe seems to be

driven mainly by technology stocks, which are outperforming

again," said Swissquote senior analyst Ipek Ozkardeskaya.

"ASML's results came in sweet."

The world's biggest supplier of chipmaking equipment

raised its 2026 forecasts and announced plans to

expand capacity, as demand linked to artificial intelligence

helped the company beat quarterly earnings expectations.

Its shares rose as much as 8% in Amsterdam, helping

lift other AI-related stocks after recent volatility caused by

concerns that valuations and AI spending expectations had

outpaced fundamentals. They pared gains and were last up 4%.

The MSCI World Price Index was broadly

unchanged. South Korea's tech-heavy KOSPI index was up

over 6%, with memory chip maker SK Hynix ( SKHY ) jumping

8.8% in Seoul. Japan's Nikkei gained 1.5%.

On Tuesday, the U.S. headline consumer price index fell 0.4%

in June, its first decline since the COVID-19 pandemic, while

core inflation for the month was flat.

Bond yields and the dollar fell after the data, leaving the

euro steady above $1.14 on Wednesday.

Two-year Treasury yields edged up 2.4 basis

points (bps) to 4.21% on Wednesday but remained roughly 8 bps

below Tuesday's 17-month high.

"For market bulls this is even better than Goldilocks could

have imagined," J.P. Morgan analysts said in a client note.

"This print should remove any fears over a July rate hike

and may assuage fears on September, too. This sets up the market

to move higher and to broaden as it does so."

Further gains were tempered after Federal Reserve Chair

Kevin Warsh told Congress that one benign inflation reading was

not enough to declare victory over inflation.

Investors will closely watch his testimony later on

Wednesday, along with U.S. producer price data and the Fed's

Beige Book, for further clues on the policy outlook.

In Europe, Germany's 2-year yields rose 1 bp to

2.75%, but remained below Tuesday's 2-year high.

EARNINGS ON THE RADAR

Meanwhile the U.S. earnings season kept surprising on the

upside following a strong start to the reporting season from

some Wall Street banks that buoyed risk sentiment.

Morgan Stanley ( MS ) reported a rise in second-quarter

profit, driven by strong mergers and acquisitions activity

despite macroeconomic uncertainty, sending its shares up 2.8% in

premarket trading.

BlackRock ( BLK ) also reported a jump in quarterly profit,

as a stock market rally boosted the value of client assets,

while healthcare conglomerate Johnson & Johnson ( JNJ ) beat

Wall Street estimates for sales and profit.

The Bank of Canada's policy decision is also due later on

Wednesday, with the benchmark rate widely expected to remain

unchanged. The Canadian dollar was broadly steady above 1.40.

Oil extended gains on Wednesday as President Donald Trump

reimposed a naval blockade on Iranian ports and Iran's Islamic

Revolutionary Guard Corps threatened to close export corridors

that benefit the U.S. and its allies.

Brent futures climbed 0.7% to $85.3 a barrel.

In China, annual economic growth slowed sharply to 4.3% in

the second quarter, missing analysts' expectations as weak

domestic demand outweighed stronger production and exports.

A rebound in Chinese retail sales in June, relatively strong

nominal GDP and hopes that authorities will respond were the

positives for investors.

"I don't think they will be worried enough to announce any

big stimulus, but it is going to be targeted, since they are

aware that growth is only for the tech areas whereas the broader

economy is continuing to underperform," said UOB economist Woei

Chen Ho.

China's yuan traded at 6.771 to the dollar, just

below a one-month high.

Spot gold was down 0.6% at $4,029.3 per ounce, paring

part of Tuesday's more than 2% surge as higher oil prices

fuelled inflation concerns and uncertainty over the U.S. rate

outlook.