European stocks edged higher as Trump delays Iran decision; weekly losses likely

Investing.com - European stocks rose Friday, rebounding after three negative sessions with the conflict in the Middle East, and the possibility of U.S. involvement, keeping investors on edge.

At 03:15 ET (07:15 GMT), the DAX index in Germany gained 0.8%, the CAC 40 in France climbed 0.6% and the FTSE 100 in the U.K. rose 0.4%. 

All three benchmark indices are on course for weekly losses, with the DAX almost 2% lower, the CAC 40 down 1.7% and the FTSE 100 0.7% lower, as of the close Thursday. 

Trump postpones Iran decision by “two weeks”

Worries that the United States of America will be dragged into the conflict between Israel and Iran have plagued investors for much of this week, particularly after President Donald Trump indicated the possibility of joining Israel’s air campaign. 

However, sentiment received a boost after the U.S. president stated late Thursday that we may need to wait two more weeks until he decides whether to launch a U.S. attack on Iran. 

The move helped clear some market concerns that a U.S. attack on Iran was imminent, especially after a host of reports suggested as much earlier this week. 

Trump has used two-week deadlines for other key decisions, including tariff negotiations, and the hope is that Tehran in the interim will be pressured to come to the negotiating table.

Dovish central banks

Earlier Friday, China kept its benchmark lending rates unchanged, as widely expected, and this followed policy-setting meetings by a number of central banks in Europe on Thursday.

These banks sent out dovish signals, with Norway’s central bank delivering its first rate cut since 2020, the Swiss National Bank dropping its rates to zero and did not rule out going negative, while the Bank of England held policy steady but saw a need for further easing.

The likelihood of further easing was illustrated Friday after British retail sales recorded their sharpest drop since December 2023 last month, as demand fell back after shoppers splurged on food, summer clothes and home improvements the month before.

Retail sales volumes dropped by 2.7% in May, the Office for National Statistics said, a much sharper decline than the 0.5% fall forecast.

Additionally, German producer prices fell in line with expectations in May, decreasing by 1.2% on the year.

Berkeley changes management

In the corporate sector, Berkeley Group (OTC:BKGFY) reported an increase in pretax profit for the year ended April 30, despite regulatory pressures and lower forward sales. 

The home construction company also said that its chairman Michael Dobson will step down after the company’s AGM in September, with CEO Rob Perrins set to become executive chair and CFO Richard Stearn appointed as CEO.  

Crude slips on Trump pause

Crude prices fell Friday after President Trump delayed a decision on U.S. invention in the Iran-Israel conflict, but were still poised for a third straight winning week.

At 03:15 ET, Brent futures dropped 2.6% to $76.79 a barrel and U.S. West Texas Intermediate crude futures fell 0.4% to $73.61 a barrel, with the U.S. having been on holiday on Thursday.

Both contracts are on course for weekly gains of over 3% as the week-old war between Israel and Iran has shown no signs of ending, continuing to threaten crude supplies from this oil-rich region.