LONDON — Global stock markets closed lower on Friday as investors weighed uncertainty surrounding negotiations between the United States and Iran, with the cancellation of planned diplomatic talks prompting caution across major financial centers, according to market data and analysts.
European shares ended the session modestly lower, while several Middle Eastern markets also declined. The pan-European STOXX 600 index slipped about 0.2%, and regional benchmarks in the Gulf recorded losses as investors assessed the outlook for an interim agreement intended to ease tensions and restore stability to energy shipments through the Strait of Hormuz. Reuters reported that uncertainty increased after scheduled U.S.-Iran talks in Switzerland were called off.
Market participants said attention remained focused on whether diplomatic efforts could produce a lasting arrangement after recent announcements of a temporary ceasefire framework and the reopening of maritime traffic through the strategic waterway. While some tanker movements have resumed, questions remain about the durability of the negotiations and the pace of normalization in regional shipping.
In the Gulf, Dubai’s main share index fell about 1.7%, ending a four-session advance, while Abu Dhabi’s benchmark declined roughly 1%, according to Reuters market data. Analysts cited concerns that delays in negotiations could affect investor sentiment despite earlier optimism surrounding the agreement.
“Investors remain cautious until there is greater clarity on the diplomatic process,” analysts at several brokerage firms said in comments reported by Reuters. Market participants also monitored developments in energy markets, where oil prices fluctuated as traders evaluated the prospects for a broader settlement and the full restoration of shipping activity through the Strait of Hormuz.
The decline followed a week in which markets had initially been supported by expectations that a temporary agreement between Washington and Tehran could reduce geopolitical risks and ease concerns about global energy supplies. Reuters reported that global equity funds attracted substantial inflows earlier in the week as investors responded positively to signs of progress in negotiations.
Currency markets also reflected a more cautious tone. The U.S. dollar strengthened, while investors sought perceived safe-haven assets amid uncertainty over the next stage of diplomacy. At the same time, U.S. financial markets were closed on Thursday for the Juneteenth holiday, limiting trading activity in some asset classes.
By the close of trading on Friday, investors remained focused on developments in U.S.-Iran negotiations. Officials from the countries had not announced a new timetable for talks, and details regarding any future agreement remained unclear.
