European Shares Set For Lower Open Amid Fresh US-Iran Tensions

(RTTNews) - European stocks may drift lower on Monday as oil prices jumped on renewed U.S.-Iran hostilities, rekindling worries about inflation and the outlook for interest rates.

Brent crude futures jumped more than 4 percent toward $80 a barrel on concerns over potential supply disruptions after the U.S. launched fresh strikes against Iran, further straining a fragile ceasefire between the two countries.

The U.S. military launched another round of strikes against Iran overnight and into early Monday "to degrade their ability to attack commercial ships freely transiting the Strait of Hormuz."

These attacks came in response to an Iranian strike on a container ship in the critical waterway the day before.

Iran responded to these strikes by attacking Gulf Arab states, including Bahrain, Kuwait, Qatar, Jordan and Oman.

"A return to full-scale hostilities would have catastrophic consequences," United Nations Secretary-General Antonio Guterres said.

Besides geopolitical tensions, investors await quarterly earnings and key U.S. data this week for directional cues.

Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Wells Fargo, Johnson & Johnson, UnitedHealth and Netflix are among the prominent companies due to report their quarterly results this week.

Amid elevated valuations, investors are looking for confirmation that AI-related investment continues to translate into robust earnings growth and resilient margins.

In economic news, a report on U.S. consumer price inflation is due to be released on Tuesday, while a report on producer price inflation is due to be released on Wednesday.

The reports could have a significant impact on the outlook for interest rates ahead of the Federal Reserve's next monetary policy meeting later this month.

Asian markets were broadly lower, with South Korea and Japan leading losses amid renewed tensions in the Middle East and anxiety over the status of the Strait of Hormuz.

Iran announced the closure of the waterway "until further notice"- a claim U.S. military and maritime authorities rejected.

The dollar rose against most of its peers while gold prices traded down more than 1 percent at $4,054 an ounce ahead of Fed Chair Kevin Warsh's first congressional testimony due this week.

U.S. stocks ended a lackluster session modestly higher on Friday, with chip and artificial intelligence-related stocks surging following a strong market debut from South Korean memory chip maker SK Hynix.

Macroeconomic developments also drew significant attention as the Federal Reserve delivered its semi-annual Monetary Policy Report to Congress ahead of Chairman Kevin Warsh's first congressional testimony.

In the report, Fed officials noted that inflation remains elevated, but they don't think it will be lasting.

The Dow and the tech-heavy Nasdaq Composite both rose around 0.3 percent while the S&P 500 added 0.4 percent.

European stocks ended mixed on Friday after U.S. President Donald Grump said on his social-media platform that he agreed to continue talks with Iran but the ceasefire between the United States and Iran is over.

The pan-European STOXX 600 finished marginally higher. The German DAX slid 0.2 percent, while France's CAC 40 and the U.K.'s FTSE 100 both edged up around 0.2 percent.