(RTTNews) - European shares are likely to begin trading positively on Friday following U.S. President Donald Trump's decision to halt strikes on Iran for a third day, as he indicated a peace agreement with Tehran is nearing completion.

Trump noted that terms to conclude the conflict with Iran have been settled and could be formalized soon, potentially in Europe this weekend with Vice President JD Vance representing him at the event.

Trump further stated that the Strait of Hormuz would resume full operations upon signing and emphasized that Iran would remain without nuclear capabilities.

Yet Iran's semi-official Fars news agency indicated that Tehran has not endorsed any draft for an initial memorandum with the United States.

"Authorities must finalize their position on the understanding text and any detailed agreement. An official statement will follow once that step is complete," Iranian Foreign Ministry spokesman Esmael Baqaei remarked.

Israeli Prime Minister Benjamin Netanyahu clarified that Israel is not involved in the memorandum but welcomed Trump's assurances that the final pact would cover removal of enriched material, dismantling of enrichment sites, curbs on missile output, and an end to Iran's backing of regional proxies.

Asian markets posted strong gains after Wall Street's main indexes recorded their largest advances since April 8, fueled by Middle East peace hopes and anticipation around Elon Musk's SpaceX listing.

South Korea's Kospi climbed nearly 8 percent, Japan's Nikkei advanced 3.6 percent and Hong Kong's Hang Seng rose almost 2 percent, led by technology and artificial intelligence shares.

The dollar remained under pressure while Treasury yields eased on reduced inflation worries. Gold held steady near $4,189 after a sharp rebound from a six-month low the prior day.

Brent crude futures dropped more than two percent toward $88 per barrel, hitting two-month lows.

Overnight, U.S. equities advanced strongly and oil prices declined as President Trump called off planned strikes on Iran, noting talks had reached senior Iranian levels and gained support from regional powers.

Trump added that the U.S. naval blockade would stay active until the agreement is sealed.

Previously, Trump had threatened heavy action against Iran and signaled plans to take control of the Kharg Island oil export hub.

Investors largely overlooked a report showing U.S. producer prices rising at the quickest pace in over three years during May.

Additional figures showed weekly jobless claims edged higher but stayed near historic lows despite war-related economic pressures.

The Nasdaq Composite jumped 2.5 percent, the Dow gained 1.9 percent and the S&P 500 rose 1.8 percent.

European markets closed mixed on Thursday after the European Central Bank lifted rates for the first time in nearly three years and signaled tight policy through 2027.

The STOXX 600 advanced half a percent. Germany's DAX edged slightly higher, while France's CAC 40 and the U.K.'s FTSE 100 each gained around half a percent.

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