BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks may open on a sluggish note on Friday as U.S. President Donald Trump's latest comments on Iran reignited geopolitical supply and inflation concerns.
Trump downplayed the prospects of a comprehensive diplomatic solution with Iran, halted the negotiation process that Vice President Vance was advancing, and instead accepted a stalemate characterized by 'no war, no talks.'
Trump also indicated he may use military force against Iran if U.S. allies and ships are threatened.
Middle East supply risks returned to haunt investors, offsetting signs of rising crude output. Iranian officials reported an attack on Sirik in Hormozgan province amid conflict with the U.S.
Four oil tankers were hit by explosions in the Strait of Hormuz after the vessels had ignored warnings and entered what Iran's military considers restricted areas of the strategic waterway.
As inflation and rate-hike worries mount, investors will scrutinize the U.S. October PPI inflation report later in the day for additional clues on the Federal Reserve's rate trajectory.
The headline producer price inflation is seen rising 6.6 percent year-on-year in the month, while the core PPI is expected show an increase of 5.0 percent.
Federal Reserve Bank of New York President John Williams said on Thursday that U.S. inflation remains high and policymakers need to take actions over time to get it back to the 2 percent goal.
Separately, San Francisco Federal Reserve President Mary Daly indicated that additional tightening will be necessary as price pressures broaden beyond energy and goods into services.
Asian markets were mostly lower, giving up early gains. U.S. equity futures were mixed, with Nasdaq futures declining despite Applied Materials forecasting fiscal first-quarter revenue above Wall Street expectations and SpaceX announcing plans to invest more than $74 billion across two artificial intelligence supercomputing campuses in Texas and Arizona.
The U.S. dollar rose to its highest level in about 19 months as Treasury yields climbed significantly on the back of inflation concerns and hawkish Fed signals.
Gold rallied nearly 1 percent to $3,915 an ounce in a likely technical rebound after falling for three straight sessions to the lowest level in more than a year.
Brent crude prices were little changed at $95.60 a barrel in Asian trading after settling around $96 a barrel on Thursday.
U.S. stocks closed lower overnight, oil prices surged nearly 3 percent and Treasury yields jumped after President Trump claimed that the U.S. does not need to make a deal with Iran and that he was directing Vice-President J.D. Vance to focus completely on alleged crime and corruption in Democratic-run cities and states and not negotiations towards a deal to end the war with Tehran.
'Those days have long since passed,' Trump said. 'We've got their money, Hundreds of Billions of Dollars, and we've got their Strait!'
The two-year Treasury note yield rose to 4.867 percent, the highest since October 14 and the yield on 10-year notes reached 5.1169 percent, the highest since October 21, as traders weighed the chance of a larger-than-usual Federal Reserve rate hike next month.
The tech-heavy Nasdaq Composite, the S&P 500 and the narrower Dow all fell around 0.4 percent as Nvidia's CEO Jensen Huang resigned amid revelations about extramarital affairs and allegations of Chinese espionage, raising questions about the future of the AI boom and the U.S.-China technology ties.
European stocks pared early gains to end mostly higher on Thursday. The pan-European STOXX 600 edged up 0.1 percent, easing off a record high. The German DAX rose 0.4 percent, while France's CAC 40 and the U.K.'s FTSE 100 both gained around 0.3 percent.
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