European markets open lower but recover: spotlight on Spain

European markets opened Thursday’s session in negative territory, affected by the heightened instability stemming from the escalating conflict in the Middle East, which increased investor uncertainty and fostered a more risk-averse climate.

The Stoxx 600 recorded a 0.4% decline shortly after the start of trading. In London, the FTSE 100 fell by 0.3%, while Germany’s DAX dropped by around 0.6%. In France, the CAC 40 declined by 0.5%, and in Spain, the IBEX 35 opened lower, down 0.4%.

Nevertheless, during the morning, the main European indices gradually recovered, supported by covering trades and a partial easing of market tensions.

The Stoxx 600 rose to gain 0.33%, the DAX recorded a +0.12% increase, and the FTSE MIB rose by 0.33%, thus reducing initial losses and returning to positive territory.

Spanish stocks are expected to draw particular attention today, as Madrid finds itself at the center of significant diplomatic tensions with the United States. U.S. President Donald Trump sharply criticized Spain for refusing to allow U.S. forces to use its bases for potential operations against Iran.

“Spain has been terrible,” Trump said on Tuesday. “We’re going to cut off all trade with Spain. We don’t want anything to do with Spain.” His remarks have raised concerns about possible economic retaliation and a worsening of transatlantic relations.

Spanish Prime Minister Pedro Sánchez described the Middle East crisis on Wednesday as a “disaster,” emphasizing the need for a diplomatic solution and de-escalation of the conflict.

Global market attention remains focused on geopolitical developments and their potential economic repercussions, particularly on international trade and the stability of financial flows.

Any restrictive measures or sanctions could have a significant impact not only on Spain but across the entire European region, increasing volatility and uncertainty among investors.

Benedetta Zimone