BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks look set to open higher on Wednesday, tracking overnight gains on Wall Street as investors await earnings from major U.S. technology companies.
The upside, however, may remain limited amid uncertainty around U.S. trade policy and rising crude oil prices as U.S. forces continued their attacks on Iranian targets for the 11th consecutive day.
Canadian Prime Minister Mark Caney said he was looking at 'all options' after U.S. President Donald Trump imposed a 50 percent tariff on a wide range of goods imported from Canada.
On Tuesday evening, Trump announced a phased tariff plan on imported generic medicines.
Under the proposal, generic drugs imported into the U.S. will continue to face zero tariffs until August 2028, after which duties will increase to 100 percent and then 200 percent, to incentivize U.S. manufacturing.
On the geopolitical front, Iran's top joint military command said that Tehran will expand its strikes and target U.S. and its allies' interests across the region if the United States attacks Iran's nuclear and other sensitive sites.
The warning came after Trump played down the prospects of near-term talks with Iran and warned that U.S. forces could strike Iran's Pickaxe Mountain, which is located near Natanz and is believed to house an undeclared nuclear enrichment facility.
Meanwhile, Iran's Islamic Revolutionary Guard Corps (IRGC) said it has 'decommissioned' an early warning radar system and a tactical radar complex around the Ali Al Salem Air Base in Kuwait, and another radar system on the country's Bubiyan Island. 'The operation to punish the aggressor continues,' it added.
The euro was marginally higher against the dollar around 1.1405 ahead of the upcoming ECB interest rate decision on Thursday. The central bank is widely expected to hold its deposit rate steady at 2.25 percent but may signal a September hike as renewed energy pressures threaten to slow the euro area's disinflation process.
Asian markets were broadly higher, driven by a rebound in semiconductor shares after data showed South Korea's semiconductor exports soared 180 percent year-on-year in the first 20 days of July, underscoring sustained AI-driven demand.
Elsewhere, orders for Taiwanese exports surged to a record high in June, Japan's exports rose for a tenth straight month, and Xiaomi raised its full-year smartphone sales target, boosting investor confidence in tech and artificial intelligence-related stocks.
The U.S. dollar index held near a one-week high while the Japanese yen slid past 163 per dollar for the first time since 1986 as investors factored in at least one Fed rate hike by the end of the year.
Gold jumped more than 1 percent to $4,128 an ounce, extending gains for a fourth consecutive session and hitting a two-week high ahead of next week's Federal Reserve meeting.
Oil extended gains after settling at a five-week high on Tuesday as risks to global supply spread beyond the Middle East to the Black Sea.
Brent crude futures rose above $92 a barrel, climbing for a fourth day, as the U.S. military completed the 11th night of strikes on Iran and Tehran retaliated across the Gulf, signaling a further escalation in hostilities.
The U.S. military said it had targeted military operations centers, maritime assets, aircraft hangars, drone storage facilities and logistic infrastructure.
Overnight, U.S. stocks gained momentum as semiconductor names took center stage ahead of a flurry of tech earnings reports due this week.
Industrial conglomerate 3M and auto giant General Motors reported better-than-expected second-quarter results, helping offset concerns over Middle East hostilities, inflation and U.S. trade policy.
The S&P 500 advanced 0.9 percent to snap a three-day losing streak, while the Dow gained 0.7 percent and the tech-heavy Nasdaq Composite rallied 1.3 percent.
European stocks closed on a firm note on Tuesday, with tech and mining stocks leading the surge amid fresh diplomatic efforts to ease Middle East tensions.
The pan-European STOXX 600 rose 0.6 percent. The German DAX surged 0.7 percent, France's CAC 40 edged up 0.3 percent and the U.K.'s FTSE 100 added 0.6 percent.
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