GLOBAL MARKETS-Asian stocks climb as oil prices slide ahead US CPI

By Ankur Banerjee

SINGAPORE, Nov 10 (Reuters) - Asian stocks rose on Tuesday as a drop in oil prices after US President Donald Trump said he plans to hold off on new military strikes against Iran lifted sentiment ahead of US inflation data that could sway the near-term interest rate outlook.

Brent crude futures were hovering at their lowest levels since early September, well below $100 per barrel, as investors pinned their hopes on possible peace talks between the US and Iran. They were last down 1% at $91.56 a barrel.

That helped push stocks higher. South Korea's KOSPI .KS11 rose 4%, while Japan's Nikkei .N225 gained 2.5%. MSCI's broadest index of Asia-Pacific shares .MIAP00000PUS pushed 1.5% higher, moving away from the seven-month low it hit last week amid a brutal tech rout. European stock futures were 0.7% higher.

The US-Israeli war with Iran, which erupted at the end of February, has stoked inflationary concerns across the globe, spurring major central banks to raise rates in recent months.

Nick Twidale, chief market strategist at ATFX Global, said the latest developments offered hope that an end to the conflict could be approaching, but there was still a considerable gap between diplomacy and a lasting peace agreement.

"The risk now is that markets have moved too far, too quickly ... any indication that negotiations are faltering could see a substantial rebound in prices as traders rapidly rebuild the geopolitical risk premium," he said.

The slump in oil prices eased inflation worries and helped lift stocks after last week's rout as a sweeping victory by Democrats in the US midterm elections fed concerns that new regulations could dent the durability of the AI trade.

On Monday, the S&P 500 .SPX clocked its biggest one-day jump since April, closing up 2.35% while the Nasdaq .IXIC closed 2.7% higher, its best day in over four months.

"We believe resets in expectations are healthy, and the AI trade appears to be working through a reset of its own at the moment," said Anthony Saglimbene, chief market strategist at Ameriprise.

Earnings reports due this week from tech companies including CoreWeave CRWV.O, a barometer of investor anxiety over AI, will be another test for markets as investors fret about the cost of the AI buildout and its profitability.

Meanwhile, details of Anthropic’s blockbuster IPO, including plans by the AI company to raise nearly $70 billion, were briefly circulated to banks before being retracted late on Monday, according to emails seen by Reuters.

Claude operator Anthropic is expected to formally launch the roadshow on Tuesday, with pricing expected in the following week. A successful IPO is seen as critical for the AI trade, investors say, amid heightened scrutiny.

NVIDIA STILL IN FOCUS

Market focus remains on Nvidia NVDA.O after the second-most valuable company in the world said its board was probing whether CEO Jensen Huang had been the target of a foreign intelligence operation.

A media report alleged he had a close relationship with a Chinese businesswoman who passed information to Beijing. Huang has said he was unfaithful to his wife without disclosing details. Shares of Nvidia, which is due to report earnings next week, fell 4.2%.

All eyes will be on US inflation data later in the day, with prices likely to have increased at a moderate pace in October, economists said, and remaining stubbornly high enough for the Federal Reserve to raise interest rates next month.

Economists polled by Reuters expect headline consumer prices to have risen 0.3% last month, with core prices posting a 0.2% increase.

Traders are pricing in an 84% chance of a rate hike next month versus 74% a week earlier, a CME FedWatch tool showed after a blowout October jobs report on Friday.

The 2-year note yield, which typically moves in step with Fed interest rate expectations, was 1.4 basis points higher at4.56%. The US dollar was steady in Asian hours. FRX/