European stock markets moved erratically on Tuesday as signs mounted that a fragile pause in hostilities between the U.S. and Iran may be eroding, prompting investors to reassess near-term risk in equities and energy-sensitive sectors.
By 03:25 ET (07:25 GMT), the pan-European Stoxx 600 was up 0.2%. Germany's Dax also climbed 0.2%, and France's CAC 40 advanced 0.3% - each recovering from marginal losses at the opening bell. In contrast, the FTSE 100 in the U.K. underperformed, slipping about 1.0%.
Reports from Monday indicated a fresh round of attacks by both the U.S. and Iran as Tehran reacted to U.S. efforts to reopen shipping through the Strait of Hormuz, a strategic waterway that handles roughly a fifth of global oil shipments. Several merchant vessels operating in the Gulf region reported fires or explosions during the incidents.
The U.S. said it successfully assisted two American-flagged vessels in transiting the strait, despite coming under attacks from Iranian drones and armed small boats. The confrontation also showed signs of spreading across the region. In the United Arab Emirates, air-defence systems engaged ballistic missiles and drones believed to have been launched from Iran, and an oil terminal in Fujairah was struck.
For much of the more than two-month old war, the Strait of Hormuz has effectively been closed to tanker traffic because of the ongoing threat of Iranian strikes, a development that pushed oil prices sharply higher and stoked worries about a possible inflationary surge capable of denting global growth.
Brent crude futures eased 0.8% to $113.56 a barrel in recent trade, but remain markedly above levels seen before the conflict began.
U.S. President Donald Trump, who is contending with mounting pressure from some lawmakers over the handling of the war, has provided limited detail on his administration's plan to restore passage through the waterway, an initiative referred to as "Project Freedom." Iran's foreign minister has cautioned the United States against becoming ensnared in a "quagmire."
At the individual stock level, HSBC's shares dropped by more than 5% after the bank reported first-quarter profit that missed expectations, driven in large part by an unexpected $400-million charge tied to a fraud case in Britain. In contrast, Anheuser-Busch InBev rallied after reporting quarterly profit that exceeded analyst estimates.
Separately, promotional material referenced the possibility of investing in HSBC under the ticker HSBA. That material described an AI-driven stock selection service, ProPicks AI, which evaluates HSBA alongside many other companies each month using more than 100 financial metrics to generate stock ideas and identify opportunities based on current data.
Market context
- Equity indices were mixed to slightly positive on the continent while the U.K. benchmark lagged.
- Renewed hostilities in the Gulf and attacks on shipping assets kept energy markets on edge.
- Notable company moves reflected both regionally sensitive risks and isolated corporate developments.