Stocks fluctuated Wednesday following a positive lead from Wall Street as traders assessed the prospect of an escalation in the Russia-Ukraine war, Donald Trump's second presidency and the outlook for US interest rates.

They were also keenly awaiting the release of earnings from chip behemoth Nvidia later in the day, which many see as a bellwether of the tech sector and AI demand that have helped power markets to multiple record highs this year.

Investors are treading carefully this week amid uncertainty after Trump's re-election and as he picks his cabinet, with several China hawks up for key positions fanning worries of another trade war between the economic superpowers.

The tycoon has pledged to ramp up tariffs on imports, with China particularly in his sights, but observers warn that such a move -- along with planned tax cuts -- could relight still stubborn inflation.

That has dampened hopes for several Federal Reserve interest rate cuts next year.

Meanwhile, the war in Ukraine has burst back into the thoughts of traders as Moscow vowed to react "accordingly" after saying Kyiv had fired its first US-made long-range missile into Russian territory.

Washington this week said it had cleared Kyiv to use the US-supplied Army Tactical Missile System against military targets inside Russia -- a long-standing Ukrainian request.

Russian Foreign Minister Sergei Lavrov said the attack showed Western countries wanted to "escalate" the conflict, adding that "we will be taking this as a qualitatively new phase of the Western war against Russia".

President Vladimir Putin signed a decree Tuesday lowering the threshold for using nuclear weapons, which the White House, Britain and the European Union called "irresponsible".

Growing worries that the war will ramp up to another, more dangerous level weighed on sentiment in Europe but the S&P 500 and Nasdaq rose for a second straight day in New York.

Asia began in the red but some markets managed to turn things around as the day wore on.

Tokyo, Sydney, Singapore, Wellington, Taipei, Bangkok and Jakarta were in retreat but Hong Kong, Shanghai, Seoul and Manila rose.

London edged up as data showed UK inflation rose more than expected in October. Paris and Frankfurt also advanced.

The main focus of attention Wednesday is the upcoming earnings from Nvidia, the world's most expensive listed company and market darling.

The company has rocketed 200 percent this year -- and an eye-watering 2,670 in the past five years -- on the back of an unprecedented surge in demand for all things linked to artificial intelligence.

There are hopes it will live up to expectations and provide some insight into its new chips. The firm's shares rose nearly five percent on Tuesday.

"Nvidia's earnings will serve as a major test, given its status as the largest company by market cap and a cornerstone of the AI revolution," said Charu Chanana, chief investment strategist at Saxo Markets.

"The central question: Is the AI theme robust enough to sustain investor enthusiasm, or is it on shaky ground."

Finalto.com's Neil Wilson said investors will be "hungry for guidance on the new chips". 

"Nvidia's Blackwell chip should become available in the first quarter of next year and could bring in between $5 billion and $8 billion, according to (investment bank) Piper Sandler," he said.

Bitcoin was sitting just below $93,000 after hitting a new all-time peak above 94,031 on Tuesday.

Key figures around 0810 GMT

Tokyo - Nikkei 225: DOWN 0.2 percent at 38,352.34 (close)

Hong Kong - Hang Seng Index: UP 0.2 percent at 19,705.01 (close)

Shanghai - Composite: UP 0.7 percent at 3,367.99 (close)

London - FTSE 100: UP 0.2 percent at 8,111.66

Euro/dollar: DOWN at $1.0574 from $1.0599 on Tuesday

Pound/dollar: UP at $1.2696 from $1.2682

Dollar/yen: UP at 155.72 yen from 154.67 yen

Euro/pound: DOWN at 83.29 pence from 83.54 pence

West Texas Intermediate: UP 0.5 percent at $69.73 per barrel

Brent North Sea Crude: UP 0.3 percent at $73.50 per barrel

New York - Dow: DOWN 0.3 percent at 43,268.94 (close)