European Shares Seen Lower As Inflation Concerns Mount

(RTTNews) - European stocks are seen opening lower on Friday as investors fret about rising inflation and the outlook for interest rates.

ECB Governing Council member Martins Kazaks said in an interview with broadcaster LTV on Thursday that the central bank will be forced to raise interest rates if rising oil prices start feeding into inflation expectations.

If is feared that disruptions around the Strait of Hormuz could keep energy prices elevated and further complicate the euro area's disinflation process.

Traders also ramped up expectations that the U.S. Federal Reserve could keep interest rates elevated for longer following a fresh batch of strong U.S. economic data.

U.S. stock futures drifted lower after U.S. Trade Representative Jamieson Greer told Bloomberg TV that Washinton's strict chip export controls against China were "not a major topic of discussion" during bilateral talks.

The Trump-Xi summit has so far produced warm words but yielded little progress on the war in Iran.

Asian markets were broadly lower as efforts to resolve the Iran war faced a stalemate.

Oil prices climbed on supply concerns after a ship anchored off the United Arab Emirates was seized and taken toward Iran, and another - a cargo ship near Oman - sank after being attacked.

In a Telegram post, Iran's Foreign Minister Abbas Araghchi has accused the United Arab Emirates of playing an active role in the U.S.-Israeli war against his country.

Brent crude futures strengthened to around $107 a barrel amid concerns over ship attacks and seizures near the Strait of Hormuz.

The U.S. dollar was set for a weekly gain of more than 1 percent and U.S. Treasury yields hit one-year highs amid bets that the Federal Reserve may raise interest rates this year, even under the new leadership of Kevin Warsh.

Gold fell over 1 percent below $4,600 an ounce, reaching a more than one-week low and on track for a weekly decline.

Overnight, U.S. stocks hit new records, driven by continued strength in AI-related companies, solid economic data and optimism surrounding the U.S.-China summit in Beijing.

The tech-fueled rally rolled on as Cisco reported upbeat Q3 results and U.S. authorities temporarily allowed around 10 Chinese companies to buy Nvidia's advanced H200 AI chips.

In economic news, retail sales extended their advance in April, and weekly jobless claims increased moderately last week, underscoring resilience.

Fed officials continued to emphasize inflation risks, with Kansas City Fed President Jeffrey Schmid calling inflation the most "pressing risk" to the U.S. economy.

While the tech-heavy Nasdaq Composite and the S&P 500 surged by 0.9 percent and 0.8 percent, respectively to reach new record closing highs, the Dow gained 0.8 percent to close above 50,000 for the first time in three months.

European stocks closed higher for a second consecutive session on Thursday, driven by gains in technology stocks.

The pan-European STOXX 600 rose 0.8 percent. The German DAX rallied 1.3 percent, France's CAC 40 advanced 0.9 percent and the U.K.'s FTSE 100 added half a percent.