BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks may drift lower at open on Wednesday as U.S.-Iran peace talks stalled and tensions continued to escalate over the Strait of Hormuz.
After a second round of U.S.-Iran peace talks failed to materialize, U.S. President Donald Trump has unilaterally extended the ceasefire with Iran indefinitely until Tehran submitted a 'unified proposal' and 'discussions are concluded one way or the other.'
Trump also said he would keep the naval blockade in place, which Iran's leaders have called an act of war.
In another significant development, the U.S. has imposed sanctions on 14 individuals, entities, and aircraft linked to Iran in an attempt to disrupt supply chains supporting Iran's military capabilities.
The Trump administration also halted U.S. dollar shipments to Iraq and frozen security cooperation programs with its military.
Iran has dismissed the ceasefire extension as 'meaningless.' Tasnim News Agency, affiliated with Iran's Revolutionary Guards, said Iran had not asked for a ceasefire extension and repeated threats to break the U.S. Navy's blockade of Iran's ports and shore by force.
Iran's military warned that it would immediately strike pre-designated targets if the U.S. launches any new attack on the country.
Military planners from over 30 nations will hold two-day talks in London from today to draft a coordinated plan to secure shipping and reopen the Strait of Hormuz.
Asian markets were mostly lower on concerns about the potential impact of the Iran war on major economies around the world.
The U.S. dollar index held steady near a one-week high after the release of robust U.S. retail sales data and following somewhat hawkish comments from Federal Reserve nominee Kevin Warsh at a Senate confirmation hearing.
Gold rebounded to trade at $4,753 an ounce after declining more than 2 percent in the previous session.
Brent crude prices remained elevated above $98 a barrel due to lingering concerns over oil supply disruptions, with Iran threatening to end oil production in the Middle East if the Islamic Republic faced attacks launched from its Gulf neighbors' territory.
Overnight, U.S. stocks ended lower amid doubts over prospects for a breakthrough to end the U.S.-Iran war.
In an interview with CNBC, President Donald Trump said he expects to 'end up with a great deal' with Tehran but indicated the military is ready to resume bombing Iran when the ceasefire expires on Wednesday.
The New York Times reported that Vice President JD Vance's trip to Pakistan has been suspended because Iran did not respond to American negotiating positions.
In economic news, retail sales increased more than expected in March and ADP's National Employment Report Pulse noted strong job creation for the fifth consecutive week, denting hopes for Federal Reserve rate cuts this year.
The Dow, the S&P 500 and the tech-heavy Nasdaq Composite all fell around 0.6 percent despite optimism over a round of solid corporate earnings.
European stocks ended lower on Tuesday, giving up early gains amid considerable uncertainty surrounding Mideast peace talks.
The pan European Stoxx 600 declined 0.9 percent. The German DAX dipped 0.6 percent, while France's CAC 40 and the U.K.'s FTSE 100 both fell by 1.1 percent.
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