European Shares Likely To Open Higher As Oil Prices Plunge

(RTTNews) - European stocks are seen opening higher on Monday as West Asia tensions eased somewhat, sending oil prices sharply lower and alleviating some inflation concerns ahead of the highly anticipated Federal Reserve interest-rate decision on Wednesday.

Currently, markets price in only a one-in-three chance of a Fed rate hike this week as inflation risks and tariffs cloud the economic outlook.

Investors await Fed Chair Warsh's press conference along with key PCE, durable goods orders and Q2 GDP readings this week for additional clues on the economic and rate outlook.

Elsewhere, the Bank of England is likely to hold its key interest rate steady at 3.75 percent when it meets on Thursday.

The Bank of Japan may also keep interest rates steady on Friday but leave room open for further hikes as inflation concerns reemerge and the yen slides toward a four-decade low.

The euro climbed back above the 1.1400 mark against the dollar as U.S. President Donald Trump's tariff campaign entered a new more entrenched phase.

Trump has threatened the European Union with steep tariffs and a new trade investigation after Brussels fined Google $1bn over antitrust violations.

"The United States of America is not a "PIGGYBANK" for Europe, nor will we allow it to be!" he wrote on Truth Social.

Asian markets were mostly higher and U.S. stock futures ticked higher ahead of earnings from four "Magnificent Seven" companies and the Federal Reserve's policy meeting.

The U.S. dollar fell against its major peers, while gold traded up more than 1 percent at $4,094 an ounce.

Brent crude futures slumped more than 6 percent toward $92 a barrel as efforts continued to bring the United States and Iran back to negotiations.

The United States and Iran have paused strikes against each other for a second day, helping ease concerns over a broader conflict and supply disruptions in the Middle East.

Iran said it made progress in talks with Oman on operational mechanisms to ensure safe passage of ships through the Strait of Hormuz.

Despite the conciliatory messages, U.S. President Trump has shared a series of AI-generated images - suggesting that the military option remains on the table.

Trump also rejected reports of a U.S. munitions shortage and claimed, "we have far more munitions than anyone in the world, and far more than we need."

Yemen's Iran-backed Houthi rebels claimed attacks on Aramco facilities in the Saudi cities on Jizan and Yanbu on Saturday.

Iranian Supreme Leader Mojtaba Khamenei issued a statement pledging his country's ongoing support for the Hezbollah terror group in Lebanon.

U.S. stocks ended mixed on Friday as oil prices fell sharply and bond yields dipped following reports that Pakistan is exploring a path toward new U.S.-Iran talks over ending the conflict.

In economic news, a new round of tariffs on 60 trading partners over forced labor concerns came into effect, replacing a temporary global duty introduced earlier this year.

A survey showed U.S. business activity expanded at the fastest pace in eight months in July, boosted by the World Cup.

While the the-heavy Nasdaq Composite fell 0.6 percent against a backdrop of AI jitters, the S&P 500 inched up marginally and the Dow gained half a percent.

European stocks closed on a firm note on Friday as investors cheered upbeat earnings news as well as data that showed Euro zone business activity returned to growth in July for the first time in four months.

The pan-European STOXX 600 surged 0.8 percent. While the German DAX rallied 1.4 percent, France's CAC 40 and the U.K.'s FTSE 100 both rose by 0.9 percent.