European Markets Poised for Modest Gains as U.S. Employment Report Looms Amid Reduced Geopolitical Tensions

(RTTNews) – European equities are poised to open modestly higher on Thursday as easing inflation and interest rate concerns provide a positive backdrop for regional markets.

Brent crude prices dropped to near $70 a barrel, their lowest level since before the U.S.-Iran conflict escalation, following Qatari reports of “positive progress” in indirect talks between the two nations. Negotiations are set to resume at the earliest opportunity after the funeral of Iran’s former Supreme Leader, Ali Khamenei.

U.S. stock futures edged upward ahead of the monthly employment report, with market expectations pointing to a June hiring slowdown and the unemployment rate holding at 4.3 percent.

Asian markets faced broad declines as AI-related uncertainties sparked a sharp sell-off in semiconductor stocks, with South Korea and Japan underperforming amid reports that Apple Inc. is exploring chip purchases from Chinese suppliers blacklisted by the Pentagon to address global memory chip shortages.

The U.S. dollar and Treasury yields remained largely unchanged, while gold prices approached $4,100 an ounce as inflation risks show signs of moderation.

Brent crude futures slid nearly 1 percent below $71 a barrel, hitting their lowest point since late February, driven by improved shipping traffic through the Strait of Hormuz.

U.S. markets closed mixed overnight, with chipmakers under pressure due to high valuations and concerns over AI sector spending. The Dow Jones Industrial Average posted a slight gain after its prior record close, while the Nasdaq Composite fell 0.7 percent and the S&P 500 dipped 0.2 percent, with Meta Platforms’ gains offering some offset.

The U.S. and Iran concluded indirect talks without significant progress toward a lasting resolution. While President Trump emphasized advancements in denuclearization efforts, Iran’s Deputy Foreign Minister Kazem Gharibabadi noted the establishment of a mechanism to monitor violations of their initial agreement.

Economic data revealed a slowdown in U.S. manufacturing activity in June, following a surge the prior month. ADP reported 98,000 new jobs added in June, the smallest gain in three months.

At the ECB Forum in Sintra, Portugal, Fed Chair Kevin Warsh reiterated his focus on achieving the 2 percent inflation target while highlighting reduced inflation risks in recent weeks. He refrained from providing specific interest rate guidance.

The pan-European Stoxx 600 declined 0.4 percent, with France’s CAC 40 down 0.8 percent and the U.K.’s FTSE 100 slipping 0.2 percent. Germany’s DAX edged up 0.2 percent.

Source link