Global markets were mixed as upbeat earnings from chipmaking equipment maker ASML and gains in Asian semiconductor stocks recharged the AI trade, while caution remained over escalating tensions in the Middle East.

Wall Street futures pointed higher after a surprise slowdown in U.S. inflation scaled back expectations for interest rate hikes.

TSX futures were flat ahead of the Bank of Canada’s latest interest rate decision this morning.

As Mark Rendell reports, the central bank is expected to remain in cruise control with a string of positive economic data providing an easier backdrop for a stand-pat interest rate decision.

In Canada, investors are getting results from Cogeco Inc. and Cogeco Communications Inc.

On Wall Street, markets are watching earnings from Johnson & Johnson, Morgan Stanley, BlackRock Inc., Bank of New York Mellon Corp., PNC Financial Services Group Inc., Cintas Corp. and Kinder Morgan Inc.

“The divergence between the U.S. and Europe seems to be driven mainly by technology stocks, which are outperforming again today,” Ipek Ozkardeskaya, senior analyst at Swissquote, wrote in a note. “... ASML’s results also came in sweet, accompanied by higher-than-expected guidance for both Q3 and full-year sales.”

Overseas, the pan-European STOXX 600 was down 0.11 per cent in morning trading. Britain’s FTSE 100 declined 0.11 per cent, Germany’s DAX fell 0.81 per cent and France’s CAC 40 gave back 0.18 per cent.

In Asia, Japan’s Nikkei closed 1.49 per cent higher, while Hong Kong’s Hang Seng gained 1.4 per cent.

Oil extended gains as U.S. President Donald Trump reimposed a naval blockade on all Iranian ports and Iran’s Islamic Revolutionary Guard threatened to close “all other export corridors that benefit the U.S. and its allies.”

Brent futures climbed 0.9 per cent to US$85.48 a barrel. West Texas Intermediate (WTI) futures rose 1 per cent to US$80.12 a barrel.

Analysts have said Iran has been signaling it may use its Houthi allies in Yemen to shut the Bab el-Mandeb gateway to the Red Sea, opening a new front against Washington and putting two of the world’s most vital energy arteries at risk.

In other commodities, spot gold was down 0.7 per cent to US$4,027.49 an ounce. U.S. gold futures for August delivery eased 0.9 per cent to US$4,034.00.

The Canadian dollar was little changed against its U.S. counterpart.

The day range on the loonie was 70.95 US cents to 71.23 US cents in early trading. The Canadian dollar was up about 0.28 per cent against the greenback over the past month.

The U.S. dollar index, which weighs the greenback against a group of currencies, rose 0.05 per cent to 100.97. The dollar was pegged at $1.4064.

The euro slid 0.05 per cent to US$1.1415. The British pound edged down 0.03 per cent to US$1.3387.

In bonds, the yield on the U.S. 10-year note was last up at 4.610 per cent.

China’s real GDP, retail sales, industrial production and fixed asset investment

Japan’s core machine orders

Euro zone’s industrial production

5 a.m. ET: Canada’s existing home sales and average prices for June. As Rachelle Younglai reports, Canada’s national real estate association has further downgraded its sales forecast for the year, saying the tepid increase in home sales in Ontario will not offset declines in other parts of the country.

5 a.m. ET: Canada’s MLS Home Price Index for June. Estimate is a year-over-year decline of 3.5 per cent.

8:30 a.m. ET: Canada’s manufacturing sales and new orders. Estimates are month-over-month rises of 1.1 per cent and 0.5 per cent, respectively.

8:30 a.m. ET: Canada’s wholesale trade for May. Estimate is a month-over-month slide of 0.7 per cent.

8:30 a.m. ET: Canada’s new motor vehicle sales for May. Estimate is a year-over-year drop of 3.0 per cent.

8:30 a.m. ET: U.S. PPI Final Demand for June. The Street is projecting a month-over-month decline of 0.1 per cent but a 6.1-per-cent year-over-year increase.

9:45 a.m. ET: Bank of Canada’s policy announcement and Monetary Policy report (with press conference to follow).

10 a.m. ET: U.S. Fed’s Monetary Policy Report to the Senate Banking Committee.

With Reuters and The Canadian Press