(fxcue news) - European stocks may open on a firm note Tuesday after the Dow Jones Industrial Average rallied to a new record high overnight on bets of an imminent rate cut by the U.S. Federal Reserve. Fed Bank of San Francisco President Mary Daly on Monday said it's appropriate to begin cutting rates and the "most likely" path ahead is for inflation to continue to slow gradually and for the labor market to add jobs at a "steady, sustainable" pace. Her Richmond counterpart Thomas Barkin said he was taking a "test-and-learn" approach to rate reductions, likely pointing to his support for an initial quarter-percentage-point rate reduction. Trading later in the day may be impacted by reaction to a report on U.S. consumer confidence for August, although activity may be somewhat subdued ahead of the release of more closely watched PCE inflation data on Friday that could reinforce that long-awaited rate cuts are coming soon. The Fed's favorite measure of underlying inflation is seen rising 0.2 percent in July for a second month, pulling the three-month annualized rate of so-called core inflation down to 2.1 percent. Investors also await the release of fiscal second quarter results from AI darling Nvidia after the close of trading on Wednesday for more insights into whether the AI trade remains in play. Closer home, Destatis is scheduled to issue Germany's revised GDP data for the second quarter later in the day. The flash estimate showed that the largest euro area economy shrank 0.1 percent sequentially following a 0.2 percent expansion in the first quarter. On the geopolitical front, the risk of a wider conflict in the Middle East has lessened in the short term but Iran still poses a significant danger as it considers striking Israel, America's top general, Air Force General C.Q. Brown, said on Monday. Elsewhere, Ukraine said it has a new long-range weapon to strike deep into Russia after a wave of Russian missiles and drones targeted Ukraine's electrical infrastructure in the largest such attack in weeks. Asian markets were subdued after big tech companies ended lower on Wall Street overnight. Regional losses were capped after data showed China's industrial profits grew faster in July. Bond yields held relatively steady, and the dollar rebounded from one-year low while gold slipped towards $2,500 per ounce. Oil was slightly lower after surging more than 7 percent in the previous three sessions on supply concerns stemming from heightened Middle East tensions and news of production cuts in Libya. U.S. stocks ended mixed overnight as chip shares declined ahead of Nvidia's (NVDA) eagerly awaited earnings later in the week. Treasury yields edged up slightly as oil prices jumped on supply concerns and data showed new orders for long-lasting goods in the U.S. rose the most in four years in July. The Dow inched up 0.2 percent to reach a new record closing high, while the tech-heavy Nasdaq Composite shed 0.9 percent and the S&P 500 dipped 0.3 percent. European stocks snapped a three-day winning streak on Monday amid light volumes. The pan-European STOXX Europe 600 finished marginally lower. The German DAX ended flat with a negative bias while France's CAC 40 edged up 0.2 percent. The U.K. markets were closed for a national holiday.