(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.