MARKET WRAPS

Stocks:

European shares were higher on Friday as investors await more clarity over the Middle East conflict.

Technology stocks surged, boosting the Stoxx 600. The DAX was higher after the Dow closed at a fresh record, with the CAC also on the rise.

U.S. Secretary of State Marc Rubio said there were some "good signs" that the U.S. could reach a peace deal with Iran but he doesn't want to be "overly optimistic." Meanwhile, Iran's President Masoud Pezeshkian said "we will never back down" in talks.

"Most of the constructive comments are from the U.S. side, while Iran probably sees itself in a better bargaining position," Commerzbank said.

Brent crude rose back above $105 a barrel as enthusiasm dimmed, with many market participants doubting the U.S. and Iran will reach an agreement on Hormuz and Tehran's nuclear program.

On the economic front, European Central Bank President Christine Lagarde is set to speak Friday. Thursday's weak eurozone purchasing managers' survey raises questions over how much the ECB can lift interest rates, ING said.

Consumer confidence in Germany has improved a little on the back of a recovery in income expectations, but the impact of the war in Iran is still being felt. German business sentiment also rebounded marginally this month, though it remains near multiyear lows.

In the U.K., consumer confidence edged up this month but remained near a two-and-a-half-year low, weighed down by the effects of the war .

Stocks to Watch

Uber's increased stake in Delivery Hero could signal a potential increase in strategic investor involvement , a takeover scenario or a break-up of the company, Berenberg said. Uber acquired additional shares in the German delivery company, taking its stake to 19.5% with further option to go to 25.1%.

Kuehne + Nagel shares looked fairly valued at current levels, Deutsche Bank said. The company's long-term strategy of market share gains and ongoing cost reductions were supporting operational performance and margin uplift over the medium term .

Games Workshop's performance for the fiscal year through the end of this month has been solid, but is unlikely to prompt changes to consensus estimates , Jefferies said.

U.S. Markets:

Stock futures were up on the last day of the trading week after the Dow rose to its first record close in more than three months on Thursday.

Trump will host the swearing-in of new Federal Reserve Chair Kevin Warsh on Friday, while traders will look to position themselves ahead of a long weekend, with markets closed Monday for Memorial Day.

Forex:

The euro fell. The currency could extend losses against the dollar as there was scope for U.S.-eurozone interest rate differentials to shift further against the exchange rate, ING said.

The dollar traded steady as investors awaited more clarity over the Middle East conflict.

Sterling was little moved as investors shrug off data that showed U.K. retail sales swung lower and public sector borrowing expanded in April.

Bonds:

Eurozone yields fell by more than their U.S. peers due to a more fragile eurozone economic outlook. Eurozone flash purchasing managers' surveys on Thursday were weak, dampening prospects for a eurozone interest-rate increase as early as June.

Yields on Treasurys declined as hopes reemerge of possible resolution to the U.S.-Iran conflict. Two-year yields were only slightly lower at 4.083% amid concerns that high inflation could lead the Fed to increase interest rates.

Energy:

Oil prices climbed on uncertainty surrounding the U.S.-Iran negotiations as the weekend approaches, with many market participants doubting the two parties will reach an agreement on Hormuz and Tehran's nuclear program.

Metals:

Gold prices held above $4,500 an ounce but remain on track for a weekly loss, pressured by a stronger dollar and fears of higher interest rates .

Copper

Copper prices were higher in early trade on strong fundamentals. Recent earnings updates from mining companies suggested that supply additions this year were likely to fall short of expectations, leaving the tightness in the copper concentrate market unresolved, Jinrui Futures said.

Iron

Iron ore was higher in early Asia trading. The supply-demand dynamic for iron ore remained largely unchanged, according to Baocheng Futures.

EMEA HEADLINES

German Business Confidence Edges Higher Though War Concerns Still Weigh

German business sentiment rebounded marginally this month, though it remains near multiyear lows, as companies adapt to the energy shock prompted by the closure of the Strait of Hormuz.

While confidence had improved through the end of last year, helped by pledged fiscal stimulus and the easing of tensions with the U.S. over trade tariffs, it swiftly sank on the outbreak of the war in Iran.

Richemont Posts Sales Uptick Despite Difficult Sector Backdrop

Richemont reported an acceleration in sales growth for its most recent quarter at a time when the luxury industry confronts challenging market conditions due to economic and geopolitical instability.

The Swiss luxury-goods company booked sales of 5.4 billion euros ($6.27 billion) for its fiscal fourth quarter ended March 31. This was 13% higher on year at constant exchange rates and slightly above analysts' estimates of 5.31 billion euros. In the preceding quarter, sales climbed 11% compared with the year-earlier period.

CVC, Groupe Bruxelles Lambert Make $12.5 Billion Bid to Take Recordati Private

CVC Capital Partners and Groupe Bruxelles Lambert said they are launching a cash bid to take Recordati private that values the Italian pharmaceutical company at 10.73 billion euros ($12.47 billion).

The tender offer values Recordati at 51.29 euros a share, a consortium formed by investment groups CVC and GBL said Friday. This is slightly below Recordati's Thursday closing price of 51.70 euros but 13% above its price before a CVC takeover approach was disclosed in March. Including a dividend of 0.71 euros that Recordati paid to shareholders this week, the offer values the company at 52 euros a share, the consortium said.

Julius Baer Shares Fall After Slowdown in Client Money Inflows

Julius Baer Gruppe shares fell after the company said client money inflows slowed at the beginning of the year due to its new risk approach and uncertainty about the Middle East war.

Shares in the Swiss private bank were down 8.9% in European morning trading, wiping out the stock's gains since the start of the year.

GLOBAL NEWS

Kevin Warsh Becomes Fed Chair Today. His First Day Could Be Rocky for Stocks.

President Donald Trump will host the swearing-in of new Federal Reserve Chair Kevin Warsh on Friday morning, the first time a central bank chief has taken the oath of office in the White House in nearly 40 years.

The ceremony carries special weight not only because of its location-Alan Greenspan took the oath with President Ronald Reagan looking on in 1987-but because Trump has publicly attacked Warsh's predecessor, Jerome Powell, for not lowering interest rates more aggressively during the president's second term.

Japan Inflation Slows But Mideast Risks Keep Rate Hike on Table

TOKYO-Japan's consumer inflation cooled in April but that is unlikely to temper rate-hike expectations as policymakers grow increasingly worried about price pressures sparked by the Middle East conflict.

Consumer prices excluding fresh food climbed 1.4% from a year earlier, notching the slowest rise since March 2022, government data showed Friday. That was lower than the 1.8% rise recorded in March and the 1.7% increase forecast compiled by data provider Quick.

U.K. Government Borrowing Rose in April as Interest Payments Jump

The U.K. government's borrowings in April were higher than a year earlier, a sign that progress in narrowing its budget deficit might slow as the conflict in the Middle East pushes inflation higher and growth lower.

In the fiscal year that ended in early April, the government reduced the gap between spending and revenues to its narrowest since the outbreak of the Covid-19 pandemic, and plans to further cut its budget deficit over coming years.

Cuba Has Few Defenses if the U.S. Military Moves Against It

Cuba's armed forces once fielded tens of thousands of well-trained soldiers during the height of the Cold War, deploying to conflicts from Angola to Syria.

Today, as the U.S. sends an aircraft carrier to the Caribbean in a pressure campaign to change the island's Communist government, Cuba's military is a ghost of its former self.

House Republicans Pull Vote to Limit Trump's Iran War Powers

WASHINGTON-House Republican leaders yanked a planned vote to restrict President Trump's ability to conduct military strikes against Iran, after it became clear that the resolution, forced to the floor by Democrats, would likely pass.

"You don't have the votes!" Democrats shouted in a heated moment on the House floor, when Republicans moved to delay the vote until after lawmakers return from a weeklong Memorial Day recess.

Trump's Envoy Gets Chilly Reception on First Trip to Greenland

NUUK, Greenland-Jeff Landry, the emissary picked by President Trump to win hearts and minds in Greenland, walked through the quiet morning streets of the capital this week, trailed by one local woman.

"Colonizers, go home," she shouted at the Louisiana governor and his entourage. "We don't want you here."

Iran Moved Billions Through Binance to Fund Regime-Continuing Into This Month

As Iran braced for conflict with the U.S., a key regime financier built a secret payment network to keep money flowing to its military forces. At its core was Binance.

(MORE TO FOLLOW) Dow Jones Newswires

05-22-26 0516ET