BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks look set to extend gains from the previous session on Wednesday as a sharp fall in oil prices helped ease concerns around inflation and interest rates.
Brent crude futures fell below $79 a barrel, extending losses for a third consecutive session and bringing the weekly decline to over 10 percent amid rising optimism over a potential interim agreement to reopen the Strait of Hormuz.
Media reports suggest that Iran is considering allowing European countries to help clear mines from the strategic waterway, marking a significant shift in Tehran's position.
Iranian Foreign Ministry spokesman Esmaeil Baqaei said that talks with Oman on securing safe shipping routes continue 'positively.'
Saudi Arabia reportedly said it intends to contain a renewed conflict with Houthi militants through behind-the-scenes diplomacy.
The pullback in oil prices amid hopes for a potential de-escalation of the U.S.-Iran conflict reduced the pressure on global bond yields, with 10-year U.S. Treasury yields falling to 4.6187 percent from last week's high of 4.747 percent.
On the earnings front, shares of AMD and SpaceX fell in after-hours trading on Tuesday despite both reporting strong growth figures.
While chipmaker AMD provided an underwhelming sales outlook, AI and satellite group SpaceX said its capital expenditures jumped nearly seven times from a year ago.
Asian stocks followed Wall Street higher, with South Korea's Kospi and Japan's Nikkei surging 3-4 percent.
The U.S. dollar hovered near a six-week low while gold jumped more than 1 percent to trade at $4,137 an ounce as traders scaled back their expectations for a September interest rate hike by the U.S. Federal Reserve.
During a speech on Tuesday, Fed Bank of Kansas City President Jeff Schmid said that current inflation remains 'too high' and there is a need for tighter policy to ensure price increases decline to the central bank's 2 percent target.
Overnight, U.S. stocks rose for a fourth straight session to close at record highs amid strong earnings and a sharp decline in oil prices following comments by Treasury Secretary that Washington and Tehran were holding talks and that a deal to reopen the Strait of Hormuz could be reached within the next couple days.
Oil prices slumped nearly 6 percent and bond yields dipped as Qatar confirmed that mediatory efforts to secure U.S.-Iran deal are progressing well, though details were lacking.
The tech-heavy Nasdaq Composite soared 2.6 percent after data analytics company Palantir reported robust second-quarter results and raised its full-year revenue forecast. The S&P 500 surged 1.8 percent and the narrower Dow advanced 1.7 percent.
European stocks hit a record high on Tuesday, with underlying sentiment supported by declining oil prices and positive corporate earnings.
The pan-European STOXX 600 climbed 0.7 percent to a record. The German DAX surged 0.8 percent, France's CAC 40 gained 0.6 percent and the U.K.'s FTSE 100 added 0.2 percent.
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