European Shares Seen Lower As Zelenskyy Says ‘Ukraine Isn’t Naive’

European stocks may open a tad lower on Wednesday after having seen sharp gains the previous day on optimism over Russia-Ukraine peace talks.

Ukraine isn’t naive, President Zelenskyy said after Russia pledged to scale down military operations around Kyiv and another city.

Pentagon spokesman John Kirby said the U.S. has detected small numbers of Russian ground forces moving away from the Kyiv area, but it appeared to be a repositioning of forces, not a retreat or even a withdrawal.

Asian stocks were mostly higher, though Japan’s Nikkei bucked the trend, falling as much as 1.6 percent due to profit taking heading into the end of the fiscal year.

Gold gained ground, buoyed by a dip in the U.S. dollar and Treasury yields while oil prices rose after two days of declines.

The U.S. Treasury yield curve briefly inverted on Tuesday for the first time since 2019 amid the Fed’s increasingly hawkish approach to tackling inflation.

Overnight, U.S. stocks posted strong gains as commodity prices declined on signs of encouraging progress in the cease-fire talks between Russia and Ukraine in Turkey.

The Dow climbed 1 percent to book fourth straight day of gains and the tech-heavy Nasdaq Composite added 1.8 percent, while the S&P 500 gained 1.2 percent, exiting the correction it entered in February.

European stocks closed higher for a third straight session Tuesday on news of “constructive” Russia-Ukraine talks and easing inflation concerns.

The pan European Stoxx 600 rallied 1.7 percent. The German DAX surged 2.8 percent, France’s CAC 40 index jumped 3.1 percent and the U.K.’s FTSE 100 advanced 0.9 percent.