LONDON - Global stocks ⁠wavered on Tuesday, while oil prices edged above $110 per barrel as the looming deadline imposed by U.S. President Donald Trump for a deal with ‌Iran threatened escalation in the Middle East and spooked investors.

Markets have been rattled since the U.S.-Israeli war on Iran broke out at the end of February, with Tehran effectively closing the ​Strait of Hormuz, a key global oil transit chokepoint, that has spurred inflation worries.

While investors have pinned their hopes on a resolution to the war, the talks so far ​have yielded ​no progress, with Trump imposing a Tuesday night deadline for a deal to be reached.

That has triggered a risk-off and cautious mood with the U.S. dollar holding onto its gains and oil prices surging.

Brent crude futures rose 1% to $111.28 a barrel, having risen over 50% ⁠since the war started.

Europe's benchmark STOXX index of 600 major companies rose 0.6%, while U.S. futures were flat as investors awaited signals as to whether President Trump would follow through or renege on his threats to destroy Iranian infrastructure.

A record-breaking quarterly profit forecast from chipmaker Samsung Electronics had earlier helped lift investor sentiment in Asian hours before the reality of the energy shock from the six-week long war set in.

"We are back on a Trump imposed countdown clock and there's no ​way to predict with ‌any confidence what will ⁠happen," said Kyle Rodda, senior markets ⁠analyst at Capital.com.

"The more intrepid traders might make a bet one way or the other. Others will look to hedge risk or stay out entirely. But there's ​not much market participants can really do but wait and see."

Iran said it wanted a lasting end to the ‌war, instead of a temporary ceasefire and pushed back against pressure to reopen the waterway, a conduit ⁠for about a fifth of the world's oil and natural gas supply.

Trump warned Iran could be "taken out" if it did not meet his deadline for a deal, vowing to destroy Iranian power plants and bridges, brushing off concerns that such actions would be a war crime.

"Any follow-through on threats to target Iran’s power infrastructure would mark a significant escalation, raising the risk of retaliatory action that could further disrupt Gulf energy facilities," said Vasu Menon, managing director of investment strategy at OCBC in Singapore.

CONFLICT TRIGGERS STAGFLATION RISKS

The conflict has spurred worries about stagflation - high inflation with weak or slow growth - upending the global rates outlook, with traders no longer pricing in any rate cuts from the Federal Reserve this year.

Data on Monday showed U.S. services sector growth slowed in March, while prices paid by businesses for inputs increased by the most in more than 13 years, an early indication that the prolonged war ‌with Iran was boosting inflationary pressure.

U.S. inflation data is due on Friday that will likely underscore ⁠the extent of the pricing pressure from rising energy prices but for now investor attention will be ​on Trump's war deadline and whether a deal is agreed.

In currencies, the euro was steady at $1.1535. The dollar index, which measures the U.S. currency against six other units, was at 100.03, near its recent highs. The dollar has been the haven of choice among investors during the tumult.

The Japanese yen last bought 159.74 per U.S. dollar, hovering ​near the crucial 160 ‌level that traders have been watching out for to gauge whether Tokyo might intervene in the wake of strong recent ⁠comments from officials.

Gold prices gained 0.7% to $4,680 per ounce ​in early trading.

(Reporting by Lawrence White in London and Ankur Banerjee in Singapore; Editing by Sonali Paul, Raju Gopalakrishnan and Susan Fenton)