European Shares Seen Tad Higher With US-Iran Talks In Focus

(RTTNews) - European stocks are seen opening higher on Tuesday following Wall Street's overnight rally.

That said, a cautious undertone may prevail as investors await the outcome of the next round of U.S.-Iran negotiations set to take place in Doha today, after recent exchange of fire in the Strait of Hormuz.

It is feared that any escalation or disruption to shipping through the vital waterway could reignite concerns over energy supplies, inflation and the outlook for interest rates.

In a post on Truth Social, U.S. President Donald Trump claimed the meeting would take place in Qatari capital amid tensions over Strait of Hormuz and asset releases. However, Iran's foreign ministry spokesperson, Esmaeil Baghaei said U.S. officials' trip to Doha had nothing to do with the Iranian delegation visiting the city and that no talks between the two sides were scheduled.

"Over the coming days, we will not have any negotiation meetings with the U.S. side at any level," he added.

Trump also later said that the U.S. delegation is traveling to Doha only to monitor implementation of the recently signed MoU, raising doubts over the future of the fragile U.S.-Iran peace process.

Meanwhile, media reports suggest that tanker traffic through the Strait of Hormuz has declined after the U.S. and Iran traded new strikes over the weekend.

A top Iranian official reiterated the country's determination to maintain control over maritime traffic moving through the Strait of Hormuz even if Oman opts not to participate.

As inflation and growth concerns mount, traders also await cues from a slew of key U.S. data due this week before the U.S. Independence Day holiday on July 3.

Among the prominent reports, the Conference Board's consumer confidence index, which includes closely watched measures of job availability, will be out later today, followed by ADP's monthly private payrolls report and the Institute for Supply Management's manufacturing survey index on Wednesday.

The all-important June jobs report is due on Thursday, with economists expecting payroll gains to slow to 75,000 from 172,000 in May. The jobless rate is likely to hold steady at 4.3 percent.

The jobs report will provide fresh insights into whether the Federal Reserve will keep interest rates elevated for an extended period.

Asian markets were mixed despite China's official manufacturing PMI returning to expansion in June and non-manufacturing activity expanding for a second month.

The Japanese yen fell to a 40-year low versus the dollar as investors factored in a slow pace of interest-rate increases by the Bank of Japan compared with growing expectations of a rate hike by the Federal Reserve.

Gold tumbled nearly 1 percent to hover around $3,980 an ounce on inflation concerns and Fed rate hike bets. Brent crude futures steadied above $73 a barrel after closing higher on Monday.

U.S. stocks rose sharply overnight, with a flurry of corporate deal activity and gains in tech stocks after recent selling adding momentum to the broader market rally.

The Dow rose 0.6 percent to set a new record closing high above 52,000 as weekend hostilities between the United States and Iran eased. The S&P 500 rallied 1.2 percent and the tech-heavy Nasdaq Composite surged 2.1 percent to snap five-session losing streaks.

European stocks ended little changed on Monday as investors weighed the durability of a fragile interim peace deal between the United States and Iran as well as possible interest rate hikes by central banks.

The pan European Stoxx 600 ended flat with a positive bias. The German DAX, the U.K.'s FTSE 100 and France's CAC 40 all slid by 0.2 percent.