BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks may drift lower at open on Friday as investors weigh escalating U.S.-Iran tensions and brace for the release of the April U.S. jobs report later in the day for directional cues.
Brent crude futures jumped toward $102 a barrel as fresh U.S.-Iran clashes in the Strait of Hormuz jolted hopes for a deal to end the 10-week conflict and reopen the crucial waterway.
The Middle East situation remains uncertain after Iran created a new agency to formalize its control over the Strait of Hormuz.
The U.S. military said it 'remained positioned and ready to protect American forces' after intercepting unprovoked Iranian attacks on three Navy ships.
While insisting talks were 'going very well,' President Donald Trump said great damage was done to the Iranian attackers and there will be harsher military action 'if they don't get their deal signed, FAST!'
Iranian state media said the country's armed forces exchanged fire with 'the enemy' on Qeshm Island in the strait. Iran's top joint military command said the U.S. targeted an Iranian oil tanker and another ship entering the strait.
Asian markets were deep in the red as oil prices rebounded amid escalating U.S.-Iran tensions.
The International Energy Agency said the war is causing 'the largest supply disruption in the history of the global oil market' and that any post-conflict production recovery would likely proceed gradually.
The dollar traded firmer against major currencies and bond yields edged higher as rising Mideast tensions stoked fears of higher inflation.
Gold ticked higher and was on track for a weekly gain after a U.S. trade court ruled that President Trump's temporary 10 percent global tariffs were unlawful.
In economic releases, industrial production and foreign trade figures from Germany as well as U.K. house price data will be in the spotlight later today.
Overnight, U.S. stocks fell from record highs as investors waited for more tangible results from U.S.-Iran negotiations to end the war and reopen the Strait of Hormuz.
The Dow dipped 0.6 percent, the S&P 500 gave up 0.4 percent and the tech-heavy Nasdaq Composite slipped 0.1 percent after CNN reported that Iran is attempting to force shippers to comply with a new protocol for transiting the Strait of Hormuz.
In economic news, new employment claims saw a small increase last week but remained relatively low.
European stocks closed lower on Thursday after a report said Iran would not allow the U.S. to reopen the Strait of Hormuz with an 'unrealistic plan.'
The pan-European STOXX 600 fell 1.1 percent. The German DAX dropped 1 percent, France's CAC 40 shed 1.2 percent and the U.K.'s FTSE 100 tumbled 1.6 percent.
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