European stocks fall as Nvidia's results approach and inflation fears mount

European stocks opened lower on Wednesday, as investors awaited Nvidia's earnings results, which could reveal the current state of the artificial intelligence boom.

At 11:00 AM, the pan-European Stoxx 600 index was down 0.1%, Germany’s DAX was down 0.4%, France’s CAC 40 was down 0.3%, and Britain’s FTSE 100 was down 0.4%.

Nvidia is a giant in the field of advanced artificial intelligence chips, and one of the most valuable companies in the world, and is scheduled to announce its latest quarterly results after the close of the Wall Street session later today.

Nvidia's meteoric rise in recent years is underpinned by plans from several major technology companies to invest heavily in building the infrastructure needed to run artificial intelligence models. Nvidia's results have become a key benchmark for traders to assess the prospects of the growing AI industry.

These figures come at a time when spending on artificial intelligence has helped support economic activity, while the world's nations deal with the fallout from the war on Iran.

Analysts have warned that the joint US-Israeli campaign against Iran, now in its third month, could trigger an inflationary wave that would weigh heavily on global growth. This is largely due to the continued closure of the Strait of Hormuz, the vital waterway off Iran's southern coast through which roughly one-fifth of the world's oil supply passes.

Final data for the Eurozone's April consumer price index is due later, while similar inflation figures in the UK have declined.

Faced with the prospect of accelerating inflation, markets have begun betting that the European Central Bank and many of its counterparts may be forced to raise interest rates. The sharp rise in government bond yields in recent days has weighed on equity market sentiment.

Hopes remain that the ongoing talks between the United States and Iran, currently stalled under a prolonged truce, will yield a solution that ends the fighting and reopens the Strait of Hormuz. Shipping data revealed that two Chinese oil tankers left the strait on Wednesday.