BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks are seen opening on a mixed note Thursday as investors monitor the latest geopolitical developments and ponder the Fed's next move on interest rates.
U.S.-Iran tensions intensified, with U.S. President Donald Trump asking the U.K. Prime Minister Keir Starmer not to hand over Diego Garcia to Mauritius.
Trump called handing over the Chagos Islands and taking the military base on a lease a 'big mistake' and said the U.S. might use Diego Garcia to eradicate a potential attack by Iran if it doesn't agree to a nuclear deal following the talks in Geneva.
CBS News reported citing top national security officials that the U.S. military is ready for potential strikes on Iran as soon as Saturday, but the timeline for any action is likely to extend beyond this weekend.
Axios reported that a potential U.S. military operation against Iran would likely be a 'massive, weeks-long campaign' and that Israel is pushing for a scenario targeting regime change in the Islamic Republic.
Elsewhere, the second day of negotiations between Ukraine and Russia ended without a breakthrough. Both the chief Russian negotiator and Ukraine's Volodymyr Zelensky indicated the talks had been 'difficult'.
U.S. stock futures were muted as investors braced for earnings from retail giant Walmart later in the day and Friday's inflation report.
Beyond Walmart, a slew of U.S. economic data, including reports on weekly jobless claims, the trade deficit and pending home sales will be in the spotlight later in the day.
Asian markets followed Wall Street higher, with China, Hong Kong and Taiwan closed for the Lunar New Year holidays while South Korea's Kospi average surged to a record, led by heavyweight semiconductor names on easing AI-disruption fears.
The dollar held gains on hawkish Fed signals and solid economic data released overnight. Gold held steady after a more than 2 percent gain in the previous session.
Oil prices held gains after their biggest rise since October amid ongoing U.S.-Iran tensions.
West Texas Intermediate crude futures traded above $65 a barrel after surging 4.6 percent on Wednesday. Brent crude contracts were modestly higher after closing above $70 for the first time in more than two weeks.
Overnight, U.S. stocks closed higher even as the Federal Reserve's January meeting minutes showed officials remain divided about the outlook for interest rates, with many members cautioning that disinflation may be slow and uneven.
In economic releases, industrial production growth for January exceeded market expectations while new orders for manufactured durable goods declined less than expected in December and housing starts hit a five-month high, separate reports revealed.
Tech shares led the surge following Meta's announcement that it will deploy millions of Nvidia chips in its data center buildout.
The tech-heavy Nasdaq Composite climbed 0.8 percent, the S&P 500 rose 0.6 percent and the Dow inched up 0.3 percent.
European stocks closed on a firm note on Wednesday after the release of soft inflation data from both France and the U.K. and reports of a leadership change at the European Central Bank.
The pan European Stoxx 600 advanced 1.2 percent. The German DAX rallied 1.1 percent, France's CAC 40 added 0.8 percent and the U.K.'s FTSE 100 surged 1.2 percent.
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