(RTTNews) – European stocks are seen opening flat to slightly lower on Wednesday as investors weigh geopolitical tensions and react to mixed economic data from China.
Brent crude futures climbed toward $86 a barrel after U.S. forces resumed the naval blockade against vessels transiting to and from Iranian ports and coastal areas, and President Donald Trump threatened to hit energy targets in Iran.
U.S. forces will intensify their campaign in the coming days, targeting power plants and bridges if Iran refuses to sign a deal with Washington, Trump was quoted as saying by Fox News as both sides escalated a standoff over control of the Strait of Hormuz.
“I’ll save the energy targets for last, but ultimately their energy targets will be hit. We’re going to knock out all their power plants. We’re gonna knock out their bridges unless they get to the table and negotiate,” Trump said in a Tuesday night interview with Fox News.
“There are currently more than 20 U.S. Navy warships and hundreds of military aircraft operating across the Middle East. American forces remain vigilant, lethal, and ready,” the U.S. Central Command said in a post on X.
Iran’s IRGC warned of targeting oil routes for U.S. allies after launching a pre-dawn strike on the U.S. AI-Azraq Air Base in Jordan.
Missile alert warnings went out in Bahrain and Kuwait early today as they faced incoming Iranian fire.
Asian markets were mostly higher, with South Korea’s chipmaker-heavy Kospi surging nearly 7 percent.
Chinese shares were subdued after China’s GDP growth came in at 4.3 percent in Q2, the weakest pace since late 2022 and missing market projections.
However, separate industrial output and retail sales released alongside GDP figures showed some signs of improvement in consumer activity in June.
The U.S. dollar struggled for direction after falling from a two-week high. Gold traded lower at $4,026 an ounce while oil prices rose for a third straight session amid the flare-up in Middle East fighting.
U.S. stocks rose overnight as softer inflation data and blockbuster bank earnings offset a profit warning from IBM.
Bond yields dipped and the odds of a July rate hike crashed from 40 percent to 20 percent after data showed both headline and core inflation eased in June.
CPI inflation fell to 3.5 percent in June, coming in below estimates for a 3.8 percent jump and down from 4.2 percent in May, dragged down by the biggest decline in gasoline prices since 2022. Core inflation slowed to 2.6 percent from a seven-month high of 2.9 percent in May.
Meanwhile, crude oil prices pulled back from day’s highs after President Trump backed away from his threat to charge a 20 percent toll on all cargo going through the Strait of Hormuz.
The President said he would instead chase “trade and investment deals” with Persian Gulf nations after speaking to their leaders.
The tech-heavy Nasdaq Composite surged 0.9 percent, the S&P 500 gained 0.4 percent and the narrower Dow finished marginally higher.
European stocks reversed course to end higher on Tuesday after the release of weaker-than-expected U.S. inflation data. The pan-European STOXX 600 inched up 0.2 percent.
France’s CAC 40 ended little changed while the German DAX edged up 0.1 percent and the U.K.’s FTSE 100 added 0.3 percent.
