BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks are seen opening broadly higher on Tuesday, though London's FTSE 100 may fall at open as oil prices fluctuated following reports that U.S. President Donald Trump is willing to end the U.S. military campaign against Iran even if the strategically vital Strait of Hormuz remains largely closed.
Instead, the administration plans to achieve core objectives - crippling Iran's navy and missile capabilities and resuming normal operations in the strait, according to a Wall Street Journal report.
Brent crude prices for May delivery held steady around $113 a barrel, giving up early gains after having risen about 2 percent earlier in the session.
Asian markets were broadly lower as investors weighed the latest developments in the Middle East.
Iran struck a Kuwaiti oil tanker near a Dubai port, highlighting heightened risks for shipping in the Persian Gulf.
Earlier, Iran said that it had received U.S. peace proposals via intermediaries and the proposals were 'unrealistic, illogical and excessive'.
Israeli forces carried out missile strikes on what they called military infrastructure in Tehran and infrastructure used by Iran-backed Hezbollah in Beirut.
U.S. forces targeted a major ammunition depot in Isfahan, Iran, intensifying regional tensions and fears of impending retaliation.
The dollar neared a one-year high and was on track for its best month since September 2022 amid an unclear trajectory for the Iran war.
Gold jumped more than 1 percent toward $4,600 an ounce but was poised for a monthly loss of about 13 percent, marking its worst monthly performance since October 2008.
Overnight, U.S. stocks ended mixed as the Middle East conflict escalated with the entry of Houthi rebels into the war and the expanding U.S. military footprint in the region.
President Donald Trump claimed great progress in peace talks with Iran but renewed his threat to 'blow up' Iran's power plants, oil wells, Kharg Island and 'possibly all desalinization plants' if a peace agreement is not reached 'shortly' and the Strait of Hormuz is not 'immediately' reopened.
Treasury Secretary Scott Bessent said in an interview with Fox News that the U.S. would eventually regain control of the Strait of Hormuz and ensure freedom of navigation either through U.S. escorts or a multinational escort force.
Meanwhile, bond yields fell after Federal Reserve Chair Jerome Powell said that longer-term inflation expectations remain 'well anchored' and there is no need to hike rates in the near term because of the oil shock.
Powell also said that the current shake-up in the private credit space doesn't seem to have the makings of a broader systemic event.
The Dow Jones edged up by 0.1 percent while the tech-heavy Nasdaq Composite shed 0.7 percent and the S&P 500 dipped 0.4 percent.
European stocks closed firmly higher on Monday despite weak Eurozone economic sentiment data and mixed signs of de-escalation in the U.S.-Israeli war in Iran, which stretched into its second month.
The pan European Stoxx 600 climbed 0.9 percent. The German DAX rallied 1.2 percent, France's CAC 40 added 0.9 percent and the U.K.'s FTSE 100 surged 1.6 percent.
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