London (AFP) - Stock markets wavered Tuesday amid growing nervousness about the debt-fuelled spending by AI heavyweights, though the focus was squarely on US midterm elections that could reshape President Donald Trump’s final two years in office.

Oil prices resumed their declines meanwhile on fresh hopes of an end to the US-Iran standoff, despite US strikes overnight on an Iranian island in the Strait of Hormuz.

They came hours after Trump insisted that a deal with Tehran “could happen”, with traders also citing unconfirmed Middle East media reports saying progress on Iran’s nuclear programme and frozen funds had been made.

“The oil market is acting like, or hoping that, there might be some validity to the report,” said analyst Patrick O’Hare at Briefing.com.

The prospect of easing energy costs helped Wall Street steady after several sessions of losses, in particular on the tech-heavy Nasdaq composite, which was up nearly one percent in late morning trading.

“Investors were sitting uncomfortably as they waited with bated breath for the US midterm elections,” said Dan Coatsworth, head of markets at AJ Bell.

Americans vote Tuesday with Democrats hoping to seize control of Congress and impose the first significant checks on Trump’s tumultuous second term in the White House.

The election amounts to a nationwide judgment on his policies, with the mood turning sharply against Republicans amid anger over soaring living costs and the war against Iran.

Coatsworth added that “uncertainty around when energy prices will ease back has added to worries about excessive spending on AI, creating a cocktail of worries”.

Earnings reports from titans including Amazon, Alphabet, Meta and Microsoft have shown they plan to keep pouring hundreds of billions of dollars into data centres and chips even as investors grow impatient for returns.

Monday saw Apple post forecast-topping sales and profits but it warned that increasing memory chip costs would hit its profit margins in the coming months.

Shares in Apple fell 2.3 percent.

But shares in AI chipmakers Nvidia and AMD both climbed.

Asian tech giants came under renewed pressure, with shares in South Korea’s SK hynix and Samsung tumbling, dragging Seoul’s Kospi index down more than three percent.

There were also losses in Shanghai, though Hong Kong edged up. Tokyo was closed for a holiday.

In Europe most stock indices ended little changed, with London’s FTSE falling under the weight of its oil and gas firms like BP and Shell.

“A sharp decline in crude oil prices – triggered by remarks from US President Donald Trump regarding potential adjustments to overseas financial support – put heavy pressure on index energy heavyweights,” said Patrick Munnelly at Tickmill.

- Key figures at around 1630 GMT -

Brent North Sea crude: DOWN 1.2 percent at $103.55 per barrel

West Texas Intermediate: DOWN 0.4 percent at $96.04 per barrel

New York - Dow: DOWN 0.2 percent at 51,872.23 points

New York - S&P 500: UP 0.5 percent at 7,580.68

New York - Nasdaq: UP 0.9 percent at 25,391.82

London - FTSE 100: DOWN 1.1 percent at 10,638.43 (close)

Paris - CAC 40: DOWN 0.2 percent at 8,029.95 (close)

Frankfurt - DAX: DOWN 0.5 percent at 25,864.62 (close)

Hong Kong - Hang Seng Index: UP 0.6 percent at 23,525.97 (close)

Shanghai - Composite: DOWN 0.8 percent at 3,608.10 (close)

Seoul - Kospi: DOWN 3.6 percent at 5,648.79 (close)

Tokyo - Nikkei 225: Closed for a holiday

Euro/dollar: UP at $1.1197 from $1.1193 on Monday

Pound/dollar: UP at $1.3418 from $1.3410

Dollar/yen: UP at 158.47 yen from 157.92 yen

Euro/pound: DOWN at 83.45 pence from 83.46 pence