European Shares Set For Strong Open Amid Easing US-Iran Tensions

(RTTNews) - European stocks look set to open higher on Monday as hopes of peace in the Middle East grew, sending oil prices sharply lower and helping ease inflation and interest-rate concerns.

Brent crude futures slumped more than 5 percent toward $83 a barrel after U.S. President Donald Trump held off on a fresh attack on Iran and said an agreement was close, signaling renewed diplomatic momentum and helping ease concerns about inflation and interest rates.

Peace talks would resume today after Middle Eastern allies, including Saudi Arabia, urged Washington to prioritize diplomacy.

Trump said a planned large-scale military strike on Iran was called off on the condition that efforts to quickly reach an agreement to reopen the Strait of Hormuz and resolve the impasse over Tehran's nuclear capabilities move forward.

Iranian President Masoud Pezeshkian said that the memorandum of understanding with the U.S. would become the cornerstone of Tehran's future foreign relations.

Separately, Iranian Foreign Minister Abbas Araghchi said negotiations between Tehran and Oman over the management of the Strait of Hormuz are in their final stages.

U.S. stock futures ticked higher ahead of another big week of earnings, with Advanced Micro Devices, Datadog, Eli Lilly, Sandisk and SpaceX scheduled to report their quarterly results.

Asian markets were mixed as heavyweight semiconductor and artificial intelligence-related shares faced selling pressure after Friday's record gains.

The yen surged against the dollar after Japan and the United States conducted coordinated yen-buying intervention and vowed they will not hesitate to take further action.

While Trump called the move a "signal of friendship", Japanese Finance Minister Satsuki Katayama warned jittery currency markets of further intervention if volatility persisted.

U.S. Treasury yields edged down slightly while gold traded higher at $4,070 an ounce amid easing inflationary concerns.

U.S. stocks closed higher on Friday, extending Thursday's rally despite bond yields surging to multi-decade high levels on worries about inflation staying high because of the U.S.-Iran war.

In a statement explaining his dissenting vote against holding the Fed's key overnight borrowing rate steady, Minneapolis Fed President Neel Kashkari said that he believes small hikes now can prevent the need for larger moves later.

Cleveland Fed President Beth Hammack argued that the longer that high inflation persists, the more challenging and costly it can be to bring it back down to 2 percent.

The tech-heavy Nasdaq Composite climbed 1 percent, the S&P 500 surged 0.7 percent and the narrower Dow gained half a percent as Amazon beat expectations on the top and bottom lines and crude oil prices pulled back off their highs after an initial spike on news of Iran attacking two tankers transiting the Strait of Hormuz under U.S. military escort.

European stocks gave up early gains to end mixed on Friday. The pan-European STOXX 600 jumped nearly 1 percent before reversing course to end 0.1 percent lower.

The German DAX inched up marginally and France's CAC 40 rose 0.3 percent while the U.K.'s FTSE 100 dipped 0.3 percent.