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MSCI gauge of world stocks near record high

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Nvidia ( NVDA ) earnings, due at U.S. close, weigh on indices

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Dollar depressed to 1-year lows by rate cut expectations

(Updates prices at 1200 GMT)

By Lawrence White and Tom Westbrook

LONDON, Aug 28 (Reuters) - Global stocks held near

all-time highs on Wednesday ahead of the release of results from

chipmaking market darling Nvidia ( NVDA ), while sterling hovered near a

2-1/2-year high as traders bet that Britain would lag the U.S.

in cutting interest rates.

MSCI's gauge of all stocks across the globe

gained 0.03% to 831.07, near the record close of 831.34 reached

on Aug. 23, as market turmoil earlier in the month faded amid

signs policymakers have begun to tame the worst surge in

inflation in 40 years.

Europe's benchmark STOXX index climbed 0.4% to a

one-month high, boosted by technology stocks ahead of rosy

expectations for the Nvidia ( NVDA ) earnings update later in the day.

Nvidia's ( NVDA ) market value has ballooned thanks to its

dominance of the computing hardware behind artificial

intelligence. The stock price is up some 3000% since 2019 and

with a market capitalisation of $3.2 trillion, a move in its

share price affects the broader market.

Second-quarter revenue will likely have doubled, though even

that may disappoint expectations. Options pricing shows traders

anticipate a near 10% - or $300 billion - swing in market value,

likely the largest earnings move of any company, ever.

The results at the "so-called 'most important company in the

world,'" stand between Wall Street and fresh record highs, noted

Capital.com analyst Kyle Rodda, and set the tone for the sector.

"The company's revenue and sales guidance is a barometer of

AI capex, with inferences to be drawn about the health of the

other mega-cap tech names," he said.

S&P 500 futures and Nasdaq 100 futures

edged lower, as investors held back ahead of the crucial

earnings report.

Any disappointment in Nvidia's ( NVDA ) results could hurt

megacaps and other semiconductor stocks, which have led 2024's

rally on the prospect of AI integration boosting corporate

profits.

Shares in Australian gambling company Tabcorp

meanwhile were headed for their largest fall since 2008,

dropping 17% to a four-year low after the company warned

compliance and other costs meant it would miss earnings targets.

DOLLAR IN THE DUMPS

Debt and currency markets were steady in the Asia session,

though the Australian dollar briefly touched its

highest since January at $0.6813 after monthly inflation data

was slightly above market forecasts.

Globally, a weakening U.S. dollar in anticipation of Federal

Reserve rate cuts has lifted most other currencies because

markets see U.S. short-term rates, currently above 5.25%, as

having the furthest to fall.

The greenback held near its lowest in more than a year

against a basket of peers, and was last 0.4% higher at 100.98,

hovering above a 13-month low of 100.51 hit in the previous

session.

Interest rate futures price 100 basis points of U.S. rate

cuts this year and last week Fed Chair Jerome Powell endorsed

the start of cuts saying "the time has come".

The tone contrasts with caution at the Bank of England,

which has helped sterling become the top-performing G10

currency with a 4.1% gain for the year-to-date.

It hit its highest in more than two years on Tuesday at

$1.3269, but eased on Wednesday to $1.3212 in European trade.

"In our view, the BoE is likely to only cut rates once a

quarter going forward," Rabobank senior strategist Jane Foley

said in a note, against a forecast for four consecutive 25 bp

cuts from the Fed from September to January.

Rates markets were steady with 10-year U.S. Treasury yields

at 3.81%, two-year yields at 3.86% and

the gap between the two at its narrowest in nearly three weeks.

Heavy selling drove bitcoin down 3% on the dollar to

$59,972. Gold prices, under pressure from the dollar's

slight recovery, slipped 0.9% to $2501 an ounce.

Oil prices fell nearly 2% on concerns about Chinese demand

and risks of a broader slowdown. Brent crude futures

traded at $78.27 barrel, while U.S. West Texas Intermediate

crude futures fell 1.76% to $74.2.