BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks are seen opening lower on Thursday as investors weigh renewed U.S.-Iran tensions and await the release of the Fed's favorite inflation gauge, the core PCE price index, later in the day for fresh clues on the monetary policy path forward under new chair Kevin Warsh.
Amid elevated energy prices, analysts expect the PCE price index to have risen by an annual 3.8 percent in April, up from 3.5 percent in March and well above the long-run rate of 2 percent targeted by the U.S. central bank.
Fed Vice Chair Philip Jefferson said on Wednesday that inflationary risks are tilted to the upside and that the current setting of monetary policy is in the right place.
Separately, Fed governor Lisa Cook said she would be prepared to raise interest rates in response to rapidly rising prices.
Asian markets slipped from record highs as investors reacted to mixed messaging over a possible U.S.-Iran peace deal.
As fragile talks with Iran continue, the U.S. military shot down four Iranian drones and struck a control center in the southern port city of Bandar Abbas to prevent a fifth drone launch.
Iran's Islamic Revolutionary Guard (IRGC) said that it targeted a U.S. airbase in Kuwait in response to the latest American aerial strike.
Earlier, U.S. President Donald Trump Indicated that negotiations with Iran were still facing major sticking points and warned Oman against attempting to influence control over the Strait of Hormuz.
Gold slipped to a two-month low below $4,400 an ounce as new U.S. strikes in Iran lifted the dollar and U.S. Treasury yields.
Brent crude futures jumped nearly 4 percent toward $98 a barrel, after having fallen more than 5 percent in the previous session to reach their lowest level in a month.
U.S. stocks inched up slightly overnight despite mixed signals about prospects for a deal to end the war in Iran and revive energy flows through the Strait of Hormuz.
U.S. Secretary of State Marco Rubio said there has been some progress in negotiations with Iran toward a deal and the U.S. will give diplomacy 'every chance to succeed.'
President Trump said he is 'not satisfied' yet with the terms of the deal being negotiated with Iran, asserting the Strait of Hormuz should be open for everybody.
After Iran's state TV published what it purported to be a draft of an initial, unofficial framework for a memorandum of understanding between the U.S. and Iran, the While House adamantly denied its accuracy.
The Dow added 0.4 percent to reach a record closing high. The tech-heavy Nasdaq Composite and the S&P 500 both finished marginally higher to reach record closing highs for the second day in a row.
European stocks ended little changed on Wednesday, failing to hold early gains amid uncertainty around trajectory of U.S.-Iran peace talks.
The pan-European STOXX 600 ended flat with a positive bias. The German DAX finished marginally lower, while France's CAC 40 gained 0.4 percent and the U.K.'s FTSE 100 inched up by 0.1 percent.
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