European stocks are anticipated to open on a cautious note Tuesday, as a sharp increase in oil prices driven by expectations of robust summer demand has rekindled concerns about inflation and interest rates.
Additionally, market sentiment may be dampened by uncertainty surrounding French political dynamics and policy, ahead of the second-round voting scheduled for July 7.
Meanwhile, there is growing speculation about Donald Trump's prospects in the U.S. presidential race after the U.S. Supreme Court ruled on Monday that Trump cannot be prosecuted for actions that were within his constitutional powers as president.
In a 6-3 decision, the court affirmed that presidents are afforded a certain level of immunity from criminal prosecution for any 'official' actions.
Following the ruling, U.S. President Joe Biden expressed dismay, stating the court had rendered a "terrible disservice" to the American people.
Trump, on the other hand, celebrated the decision with a social media post declaring, "BIG WIN FOR OUR CONSTITUTION AND DEMOCRACY. PROUD TO BE AN AMERICAN!".
In economic developments, Eurostat is expected to release flash inflation figures for the eurozone for the month of June later today.
Projections indicate that overall inflation may ease slightly to 2.5 percent from 2.6 percent in May, with the core inflation rate anticipated to decrease to 2.8 percent from 2.9 percent previously.
European Central Bank board members Luis de Guindos and Frank Elderson are scheduled to speak at the ECB Forum on Central Banking 2024 in Sintra, Portugal.
Investors will also be keenly listening for remarks from Federal Reserve Chair Jerome Powell and ECB President Christine Lagarde for further guidance on the interest rate outlook.
The U.S. ISM services PMI and employment data will be closely monitored this week, as expectations rise for a potential Fed rate cut in September.
Asian markets presented a mixed picture, with stocks in China and Hong Kong gaining ground following data that indicated a slowed downturn in China's residential real estate sector in June.
Japan's Nikkei increased by over 1 percent, surpassing 40,000 points for the first time since April 4, buoyed by a surge in semiconductor stocks amid the AI industry boom.
The U.S. dollar strengthened, and gold prices saw a slight decline, while oil prices continued to climb, having gained nearly 2 percent in the overnight U.S. trading session.
U.S. equities closed higher on Monday, supported by data indicating a third consecutive contraction in manufacturing activity for June, alongside a drop in prices paid by manufacturers to a six-month low, which bolstered hopes for a Fed rate reduction in September.
The Dow Jones Industrial Average edged up by 0.1 percent, the S&P 500 added 0.3 percent, and the tech-heavy Nasdaq Composite surged by 0.8 percent.
European stocks recorded gains on Monday as well; the euro reached its strongest level since mid-June, and the premium investors demand for holding French bonds dropped, following initial election results in France that showed a narrower-than-anticipated lead for far-right candidates.
The pan-European STOXX 600 index rose by 0.3 percent. Germany's DAX inched up by 0.3 percent, France's CAC 40 rallied 1.1 percent, and the U.K.'s FTSE concluded marginally higher.
