European stocks weakened on Friday as market participants reevaluated the prospects for an early resolution to the Iran-related tensions and monitored potential interruptions to crude oil shipments.
By 03:04 ET (07:04 GMT), the pan-European Stoxx 600 had slipped 0.4%. In national markets, Germany's Dax was down 0.1%, France's CAC 40 shed 0.4% and the U.K.'s FTSE 100 eased 0.4%.
Political developments contributed to the softer tone. President Donald Trump announced a three-week extension to a ceasefire between Israel and Lebanon after meeting with diplomats from both countries. The ceasefire's durability was questioned because representatives from Hezbollah, the Lebanese militant group engaged in the fighting, did not take part in the discussions.
Earlier in the week, the U.S. had declared an indefinite ceasefire with Iran but kept a blockade in place against Iranian ports. The halt to active hostilities has been fragile and uncertain. Tehran reacted to the American blockade by taking actions intended to assert its control over the Strait of Hormuz, a waterway that handles roughly a fifth of global oil shipments, including attacks on several vessels traversing the strait.
The United States has also seized vessels flying the Iranian flag. President Trump has said he ordered the U.S. Navy to "shoot and kill" Iranian boats attempting to lay mines in the strait. With few signs that the corridor will be reopened soon, international crude oil prices have climbed back above $100 a barrel. That rise in energy costs raises the prospect of renewed inflationary pressure and increases concern about the potential for slower global economic growth.
Alongside geopolitical developments, corporate results influenced trading. Shares of SAP climbed by more than 5% after the German software company reported a 17% increase in first-quarter profit, a result that exceeded analysts' estimates and that the company attributed largely to strength at its cloud division.
Investors continued to balance the immediate implications of higher oil prices against earnings news across Europe as they assessed risks to consumer prices and growth trajectories.
Clear summary: European markets fell on Friday amid cooling hopes for immediate peace in the Iran-related conflict and renewed risks to oil supply via the Strait of Hormuz, while corporate earnings, led by SAP's stronger-than-expected quarterly profit, provided mixed signals.