U.S. stock futures were mostly higher in early European trading, as investors look ahead to U.S. Federal Reserve minutes on Wednesday, which are expected to give an insight into the committee's views on interest rates. U.S. consumer sentiment will also be in focus this week, with earnings due from Walmart and Home Depot.

Meanwhile, the 60-day memorandum of understanding between the U.S. and Iran expires on Monday, with talks between the two countries still stalled. "The U.S. is preparing fresh sanctions to pressure Iran back to the negotiating table, while Iran showcased a more offensive stance last week, hinting that peace is not in sight for the near future," said Swissquote's Ipek Ozkardeskaya.

Treasury yields were lower, while gold prices rose.

--U.S. futures were mostly higher, with the Dow Jones Industrial Average down 0.1%, the S&P 500 up 0.1%, while the tech-heavy Nasdaq climbed 0.5%. Attention will turn to results from large U.S. retailers this week, which will indicate the impact of recent turbulence on U.S. consumer sentiment. "I expect to see soft results for many retailers, and a strong quarter for those offering low prices --like Walmart--but the latter will probably not change the fact that the biggest earners in the S&P 500 earned big despite the potentially weakening consumer leg of the economy," said Ozkardeskaya. The Middle East conflict will also be in focus with the U.S.-Iran ceasefire due to end.

--European markets started the new week mostly higher after most ended the previous week lower, except for Germany's DAX, which closed at a new record. The Europe-wide Stoxx 600 index was up 0.2% and boosted by technology and pharma stocks. SpaceX supplier STMicroelectronics was up 3%, while Dutch semiconductor-equipment maker ASML Holding and smaller rival ASM International were up 2.35% and 2.7%, respectively. Dutch pharmaceutical company Argenx was leading the index risers--up around 7.7%--after reporting positive trial results. Germany's DAX and London's FTSE 100 indexes were up 0.02% and 0.3%, respectively, while France's CAC 40 was down 0.1%.

--Asian stocks were mostly higher as investors rotated back into artificial-intelligence names, though gains were capped by unease over the Middle East. Japan's Nikkei Stock Average rose 0.7%, China's Shanghai Composite Index put up 1.4% and Hong Kong's Hang Seng Index moved up 1.5%.

--The dollar fell to a 10-day low against a basket of currencies as expectations for the Federal Reserve to raise interest rates this year dimmed. Recent weak jobs data and subdued inflation data prompted markets to trim rate rise bets. Investors are now looking ahead to the Fed's latest meeting minutes on Wednesday for any policy clues. "Given Fed Chair Kevin Warsh has stepped back from offering policy guidance, the minutes may shed extra light on how the Fed is weighing inflation risks as well as their urgency to act should those risks remain elevated," Deutsche Bank analysts said in a note. The DXY dollar index fell to as low as 99.452.

--Yields on U.K. government bonds, or gilts, were little changed ahead of key economic data releases. These include U.K. labor market figures Tuesday and inflation data set to be released on Wednesday. The data will be watched for clues on the prospects of the Bank of England raising interest rates in 2026. Markets currently fully price in one quarter-point BOE rate rise in December, LSEG data showed. Ten-year gilt yields were steady at 5.018%, Tradeweb data showed.

--U.S. Treasury yields declined across maturities, though stayed at elevated levels, as Brent oil is largely stable, while market expectations of Federal Reserve interest-rate hikes are weakening. "Expectations of Fed hikes are being reduced," Danske Bank's Filip Andersson said in a note. The market is currently pricing in 35 basis points of Fed rate hikes for the next 12 months, less than Danske's call of two hikes of 25 basis points each. The Middle East situation remains fluid, with little progress in talks to reopen the Strait of Hormuz. The two-year Treasury yield fell 1.5 basis points to 4.155%, while the 10-year yield was down 1.4 basis points at 4.681%, according to Tradeweb.

--Eurozone government bond yields traded stable even as U.S. Treasury yields fell, as high energy prices remain a key factor in Europe. "Hopes of a deal between U.S. and Iran are fading as U.S. is set to announce measures for Iran's economic isolation this week," Jefferies' Mohit Kumar said in a note. There is no input from the economic data side, nor from any supply. The 10-year Bund yield was stable at 3.20%, according to LSEG data.

--Bitcoin rose as a paring of U.S. interest-rate rise expectations supported risky assets. However, bitcoin's gains were limited amid uncertainty over the U.S.-Iran conflict. Uncertainty over crypto regulation also remained an "important restraint," Zaye Capital Markets analyst Naeem Aslam said in a note, referring to digital assets bill Clarity Act having stalled in the U.S. Senate. Bitcoin's outlook depends on whether improving liquidity and institutional access can overcome regulatory delays and short-term exchange traded fund outflows, he said. Bitcoin rose 0.9% to $63,605, LSEG data showed.

--The lack of progress in reaching a peace deal in Iran has put oil traders in a wait-and-see mode. Front-month West Texas Intermediate crude oil futures were last 0.8% lower at $81.77 a barrel and front-month Brent crude oil futures were 0.1% lower at $88.44 a barrel.

--Precious metals gained some momentum, with spot gold up 0.5% at $4,397.11 a troy ounce and spot silver advancing 1.5% to $65.63 a troy ounce.