By Harry Robertson and Wayne Cole
LONDON/SYDNEY, Aug 10 (Reuters) - Global equities inched higher on Monday after Wall Street hit a record high on Friday, with markets focused on the outlook for Federal Reserve interest rates and a potential deal to reopen the Strait of Hormuz energy transit route.
Europe's continent-wide Stoxx 600 index rose 0.2%, while futures for the U.S. S&P 500 climbed 0.1% and those for the tech-focused Nasdaq firmed 0.2%.
U.S. stocks hit a record high on Friday after a weaker-than-expected
jobs report caused traders to cut their bets on Fed rate hikes.
As markets focus on inflationary pressures, Iran said on Sunday that a deal with Oman about transit through the Strait of Hormuz was in its final stages.
Yet Iran reiterated that the waterway would only reopen once the United States met other conditions, including compensation and an end to sanctions and military threats.
Brent crude rose 2% to $85 a barrel as shipping through the strait remained at a trickle, although it remained well below late April's peak of more than $126 a barrel.
The key event for markets this week is the U.S. inflation reading for July on Wednesday, which will impact Fed officials' thinking on rates.
Economists polled by Reuters expect the consumer price index to have risen 3.4% year-on-year in data on Wednesday, compared to 3.5% the previous month.
"We are keeping our view of no hikes from the Fed for this year," said Mohit Kumar, a senior European economist at Jefferies. "Key would be this week's inflation report."
"If oil prices remain contained and move lower from the current levels, that would prevent the need for the Fed to hike rates," Kumar said.
Asian shares rose overnight, tracking Wall Street stocks, with Japan's Nikkei up 2.1% while South Korea added 0.7%.
Overall, the MSCI index of global stocks climbed 0.1% on Monday.
EARNINGS HELP POWER STOCKS
Stock markets around the world have hit record highs in recent weeks, boosted by strong corporate earnings.
Analysts at BofA said that with nearly 90% of S&P 500 results in, earnings per share were up 30% on the year after excluding investment gains at Alphabet and Amazon. A 76% EPS beat rate matched the strongest level since 2021.
Strategists at JPMorgan revised up their 2026 EPS estimate to $365, marking annual growth of 35%, and lifted their S&P 500 price target to 8,000 from 7,800. It is currently at 7,758.
Earnings are lighter this week, but include semiconductor company Applied Materials, networking equipment maker Cisco and cloud infrastructure technology company CoreWeave.
Yields on 10-year Treasuries rose very slightly to 4.664%, with the market bracing for $125 billion in new issuance this week.
Currency markets were broadly steady, with the euro just off a seven-week top at $1.155.
The dollar rose 0.5% against the yen to 158.68, though investors were still wary of intervention.
Bank of Japan policymakers warned of mounting inflation risks that could require a faster-than-expected pace of interest rate increases, a summary of opinions at their July meeting showed, boosting the case for a September hike.
(Reporting by Harry Robertson in London and Wayne Cole in Sydney; Editing by Sharon Singleton and Jan Harvey)
