European Shares Set For Softer Opening Ahead Of Fed Decision

(RTTNews) - European stocks are seen opening on a cautious note on Wednesday as investors seek more clarity on the U.S.-Iran interim peace deal and await the U.S. Federal Reserve's interest-rate decision later in the day for new insights on policy signals under the new Fed Chair.

Oil prices hovered near three-month lows, helping ease worries about inflation and the outlook for interest rates.

That said, investors await more clarity on the U.S.-Iran interim peace deal that will be formally signed on Friday in Switzerland.

According to Bloomberg, Iran could have access to up to $300 billion in reconstruction funds as part of its agreement with the United States.

The proposed agreement could unlock billions in frozen Iranian assets and allow the country to immediately begin selling oil and fuel.

U.S. stock index futures traded higher ahead of the Federal Reserve's rate decision later in the day.

The U.S. central bank is widely expected to keep interest rates unchanged, with traders likely to scrutinize the policy statement, updated economic projections, and Warsh's first post-meeting press conference for additional clues on the Fed's rate trajectory.

U.S. retail and pending home sales readings for May along with consumer price index data from the U.K. and the European Union may also garner some attention as the session progresses.

Asian markets were mixed in cautious trade, with Japan's Nikkei hovering close to record highs led by technology stocks.

The dollar index was steady while gold was subdued below $4,325 an ounce after four straight days of gains.

Brent crude futures fell toward $78 a barrel, extending losses after having tumbled nearly 5 percent in the previous session on expectations of increased supply.

Overnight, U.S. stocks ended mixed as markets waited for the U.S.-Iran peace deal to be finalized. The narrower Dow gained 0.6 percent to reach a new record closing high on eased inflation and rate worries after U.S. officials indicated that the interim peace deal will reopen the Strait of Hormuz to commercial traffic without tolls by Friday.

Yields on Treasuries fell and oil prices remained close to three-month lows after the Wall Street Journal reported that the United States will allow Iran to immediately resume oil exports, marking a significant shift in sanctions policy.

The tech-heavy Nasdaq Composite fell 1.2 percent and the S&P 500 gave up 0.6 percent, weighed down by losses in chip stocks.

European stocks edged higher on Tuesday, building on the previous session's record close, on eased energy supply concerns.

The pan-European STOXX 600 gained 0.3 percent. The German DAX inched up by marginally, France's CAC 40 surged 0.8 percent and the U.K.'s FTSE 100 added 0.6 percent.