European Shares Set To Slide Amid Trade, Geopolitical Tensions

(RTTNews) - European stocks may drift lower on Thursday as investors react to Sino-U.S. trade deal uncertainty and escalating U.S.-Iran tensions.

There is considerable ambiguity over the U.S.-China trade deal in the wake of conflicting claims about tariff rates and lack of confirmation from Beijing.

U.S. President Donald Trump did not fully spell out what concessions the U.S. made. Also, the framework must be approved by the heads of state of the two countries.

Adding to investor anxiety, Trump said he would notify trading partners within the next one to two weeks about the new unilateral tariff rates, with the choice to accept or reject them.

Elsewhere, in a sign of growing regional tensions, Iran said it will strike U.S. bases in the Middle East if nuclear talks fail and conflict arises with Washington.

As hopes of a diplomatic resolution erode, the White House has also warned of military measures and decided to move embassy staff and dependents partly due to Israeli preparations for attack on Iran.

Asian markets were mixed in cautious trade and the dollar weakened while gold held firm near $3,370 per ounce on rising U.S.-Iran tensions, soft U.S. CPI data and expectations for two Fed reductions by the end of 2025.

Oil prices were slightly lower after surging over 4 percent on Wednesday to hit a two-month high on fears that any Middle East conflict could disrupt shipping routes or oil infrastructure across the Gulf.

In economic releases, trading later in the day may be impacted by reaction to monthly GDP, industrial production and foreign trade from the U.K.

Across the Atlantic, reports on producer price inflation and weekly jobless claims may garner some attention.

Overnight, U.S. stocks gave back early gains to end lower as trade uncertainty and rising geopolitical tensions offset a better-than-expected inflation report.

Data showed the consumer price index increased 0.1 percent for May, putting the annual inflation rate at 2.4 percent.

Core inflation has come out to be lower than expected for the fourth month in a row, raising pressure on the Federal Reserve to cut rates.

On the trade front, President Trump said a trade framework with China has been completed, with Beijing supplying full magnets and "any necessary rare earths" up front and the U.S. allowing Chinese students into its colleges and universities while keeping tariffs unchanged.

"WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%," Trump added. "RELATIONSHIP IS EXCELLENT!"

Later, Trump said he and Chinese President Xi Jinping "are going to work closely together to open up China to American Trade."

The tech-heavy Nasdaq Composite dropped half a percent, the S&P 500 lost 0.3 percent and the narrower Dow finished marginally lower.

European stocks closed mostly lower on Wednesday as early gains evaporated. The pan European STOXX 600 declined 0.3 percent.

The U.K.'s FTSE 100 edged up by 0.1 percent while the German DAX dipped 0.2 percent and France's CAC 40 shed 0.4 percent.