BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks are seen opening higher on Tuesday, though the upside may remain capped somewhat after reports suggested that U.S. President Donald Trump and his national security team are skeptical of Iran's offer of a deal to reopen the Strait of Hormuz and end the two-month war, while setting aside nuclear negotiations for later.
Citing anonymous U.S. officials, ABC News reported that the deal fell short of Washington's red lines - dampening hopes for a resolution to the conflict that disrupted energy markets and tightened global financial conditions.
Meanwhile, in an escalation of its 'maximum pressure' campaign, the Trump administration has warned foreign companies and governments of tough sanctions if they continue doing business with Iranian airlines.
The warning extends beyond direct trade to include any third-party facilitation of services. 'Doing business with sanctioned Iranian airlines risks exposure to U.S. sanctions, U.S. Treasury Secretary Scott Bessent warned in a post on X.
Beyond the geopolitical headlines, investor focus is also on upcoming earnings and a slew of central bank decisions.
Amazon, Meta, Alphabet, Microsoft and Apple are among the prominent companies scheduled to report their financial results this week.
The Federal Open Market Committee (FOMC) will announce its policy decision on Wednesday, with the central bank widely expected to keep the benchmark interest rate unchanged. This meeting will be Jerome Powell's last as chair of the Federal Reserve before his official term ends on May 15.
Earlier today, the Bank of Japan kept its policy rate steady in a split 6-3 vote and upgraded its inflation forecasts.
The Bank of Canada, the Bank of England and the European Central Bank are all due to meet this week.
Asian markets were broadly lower, even as South Korea's Kospi average clinched another record high ahead of big tech earnings.
The dollar held steady and gold was subdued at $4,658 an ounce, while Brent crude prices jumped above $109 a barrel as the Strait of Hormuz remained effectively closed, keeping global supply concerns intact.
U.S. stocks fluctuated before ending narrowly mixed overnight. A cautious undertone prevailed as U.S.-Iran peace talks stalled over the weekend and the focus shifted to upcoming earnings from the 'Magnificent Seven' companies as well as key central bank meetings.
The tech-heavy Nasdaq Composite inched up 0.2 percent and the S&P 500 added 0.1 percent to reach new record closing highs, while the narrower Dow slipped 0.1 percent.
European stocks ended slightly lower on Monday due to uncertainty over stalled U.S.-Iran diplomacy to ease tensions and reopen the Strait of Hormuz.
The pan-European STOXX 600 declined 0.3 percent. While the German DAX and France's CAC 40 both slid by 0.2 percent, the U.K.'s FTSE 100 dipped 0.6 percent.
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