European Shares Set To Drift Lower As Gulf Tensions Persist

(RTTNews) - European stocks are seen opening lower on Tuesday amid skepticism the U.S. and Iran were close to end of war talks.

Iran denied that it had engaged in negotiations with the United States. However, reports suggest the country is open to negotiations with tough conditions.

The White House has played down reports regarding possible U.S.-Iran talks in Pakistan, calling the situation "fluid" and diplomatically sensitive.

"These are sensitive diplomatic discussions, and the U.S. will not negotiate through the press," Press Secretary Karoline Leavitt said.

"We are continuing our strikes against Iran and Lebanon without pause," Israeli Prime Minister Benjamin Netanyahu said, adding he spoke with U.S. President Donald Trump about safeguarding vital interests.

Iran launched multiple waves of missiles at Israel this morning, Iranian state media reported.

As the war drags on, Saudi Arabia and the United Arab Emirates are moving closer toward actively joining the fight against Iran, according to the Wall Street Journal. Asian markets were mostly higher in cautious trade as Trump's Iran war comments helped traders to price in a few basis points worth of Federal Reserve easing by the end of the year.

Gold fell more than 1 percent, marking its tenth consecutive session of losses and deepening its grip in bear market territory, pressured by a stronger U.S. dollar and diminishing expectations of a Federal Reserve rate cut this year.

Brent crude futures were up more than 4 percent to hover around $100 a barrel after plunging over 10 percent in the previous session.

U.S. stocks rebounded overnight following President Trump's statement that the U.S. and Iran have had "very good and productive conversations regarding a complete and total resolution of hostilities in the Middle East" and therefore he has instructed the military to postpone any strikes against Iranian power plants and energy infrastructure for five days.

However, Iran denied these talks had happened. "No negotiations have been held with the U.S., and fake news is used to manipulate the financial and oil markets and escape the quagmire in which the U.S. and Israel are trapped," Mohammad-Bagher Ghalibaf, speaker of Iran's parliament wrote on X.

The Dow, and the tech-heavy Nasdaq Composite both rallied around 1.4 percent while the S&P 500 added 1.2 percent.

European stocks reversed early losses to close higher on Monday after the U.S. halted strikes on Iranian energy infrastructure.

The pan European Stoxx 600 gained 0.6 percent. The German DAX surged 1.2 percent and France's CAC 40 climbed 0.8 percent while the U.K.'s FTSE 100 slipped 0.2 percent.