European shares flat ahead of Nvidia earnings

In Europe, ECB policymakers are ready to raise rates at the September meeting to counter the economic effects of the Iran war, though they are reluctant to signal further tightening beyond that, three sources told Reuters.

Among individual stocks, SAP SAPG.DE fell 4.2% and was the biggest drag on the STOXX 600 after U.S. software maker Intuit INTU.O issued a disappointing forecast, while UBS downgraded the German software group to "neutral".

Meanwhile, Iran said it had restarted talks with Oman on managing the Strait of Hormuz amid mounting pressure from U.S. President Donald Trump in the nearly six-month conflict that has roiled oil markets and stoked global inflationary worries.

Brent crude futures LCOc1 fell for a third straight day, dropping more than 2% to around $86 a barrel on prospects of increased oil flows through Hormuz, helping drive bond yields lower. The energy index .SXEP fell 1.2% and was the worst performing sector on the STOXX 600. O/R

Attention is also on a key U.S. inflation report due later in the day and Federal Reserve Chair Kevin Warsh's speech at the Jackson Hole symposium on Friday, as investors look for fresh clues on the U.S. interest rate path.

"We've got a lot of risk coming up and, while European markets won't be directly impacted by Nvidia's results or Kevin Warsh's speech, they will be indirectly affected," said Kathleen Brooks, research director at XTB.

European shares were largely flat on Wednesday as investors braced for Nvidia's earnings report, while hopes that the Strait of Hormuz may reopen soon pushed oil prices lower.

The pan-European STOXX 600 .STOXX was up 0.06% at 656.87, as of 0823 GMT, with luxury stocks .STXLUXP leading sectoral gains, up 1.2%.