European stocks open slightly higher as Trump's Iran deadline nears
European stock markets opened slightly higher on Tuesday, but gains remained limited as investors remained cautious about taking significant risks ahead of US President Donald Trump's latest deadline for Iran. Reuters reported that European stock futures were trading weak to flat ahead of the opening, while global markets remained clouded by concerns that tensions in the Middle East could flare up again if no agreement is reached on opening the Strait of Hormuz.
Market sentiment was buoyed by hopes that diplomacy was still open, but room for optimism remained limited as Iran reportedly rejected the existing ceasefire proposal and sought a more permanent solution. At the same time, Trump set a new deadline and threatened tougher measures if progress was not made, prompting investors to adopt a wait-and-see approach. This made the rise in European stock markets appear more like a cautious bounce than a truly strong rally.
Another factor limiting gains was the surge in energy prices. Reuters reported that Brent crude oil prices rose to around US$111 per barrel, a more than 50% increase since the conflict began, as the closure of the Strait of Hormuz raised concerns about global supply disruptions. Such a rise in oil prices is significant for European markets as it could add to inflationary pressures, worsen growth prospects, and complicate expectations of interest rate cuts. (Zaf)
