European Shares Seen Tad Higher At Open As Oil Extends Slide

(RTTNews) - European stocks are likely to open higher on Wednesday as investors keep a close eye on developments between the U.S. and Iran, and look forward to a crucial U.S.-China summit on Thursday, which could lead to new trade agreements amid escalating competition and restrictions on advanced technologies.

Meanwhile, U.S. President Donald Trump has expressed support for a possible ban on diesel exports to address the issue of escalating energy costs, sparking debate among U.S. officials and energy experts about economic and global impacts.

European natural gas inventories have fallen to levels not seen since 2021, raising fears of a repeat of the 2022 energy crisis.

The U.S. dollar held near a two-month high after New York Fed President John Williams said the central bank's rate-control framework has worked well and can be adjusted as markets evolve over time.

Chicago Fed President Austan Goolsbee noted that supply stocks have become more frequent and more persistent in recent times, and the Fed can longer simply "look through" them as transitory factors, hinting at further tightening.

St. Louis Fed President Alberto Musalem said additional rate hikes may be needed to lower inflation. Richmond Fed President Tom Barkin and Boston Fed President Susan Collins also stressed that inflation risks outweigh employment risks.

U.S. manufacturing and service PMI figures will be in the spotlight later today ahead of reports on initial jobless claims, new home sales, durable goods orders and consumer confidence due later in the week.

Asian markets were mixed ahead of the high-stakes U.S.-China summit. Gold traded below $4,350 an ounce on expectations of more interest rate hikes from the Federal Reserve while Brent crude futures slipped toward $98 a barrel, extending losses for a sixth consecutive session on hopes for progress in U.S.-Iran talks.

Media reports suggest that Saudi Arabia has restarted its East-West oil pipeline and may have resumed exports from the Red Sea port of Yanbu following drone attacks on September 11.

U.S. President Trump said officials held a "very productive" meeting with Iranian envoys but warned of dire consequences if no deal is reached.

U.S. stocks ended mixed overnight as Treasury yields rebounded on expectations for further interest-rate hikes from the Federal Reserve.

The two-year Treasury yield reached a fresh two-year high of 4.7879 percent after President Trump said that a deal with Iran may be possible after the midterm elections, but he may instead just decide to "annihilate the Islamic Republic" if no deal is reached. He also spoke of setting up a "large military presence" in Greenland.

The Dow dropped 0.4 percent and the S&P 500 finished marginally lower while the tech-heavy Nasdaq Composite rose half a percent to notch a record high close for a second day running amid the success of Meta's new AI agent and upcoming U.S.-China talks on artificial intelligence.

European stocks ended mixed on Tuesday following reports that Iran is ready to reopen the Strait of Hormuz within seven days if the United States eases military pressure and lifts its blockade on Iranian ports.

The pan-European STOXX 600 edged up 0.1 percent. The German DAX finished marginally higher and France's CAC 40 rose 0.2 percent while the U.K.'s FTSE 100 slipped 0.3 percent.