European markets uncertain amid Middle East tensions, rising oil, and defense stocks declining

European markets opened Tuesday’s session in mixed territory. After the first trades, the main indices showed divergent trends, reflecting a climate of uncertainty. Attention remains focused on the escalation in the Middle East, with Donald Trump speaking optimistically about a possible agreement with Iran, while Tehran denies any progress. Meanwhile, oil prices have risen above $100 per barrel, and defense stocks have declined.

Performance of Key Indices

Specifically, the CAC 40 in Paris stood at 7,720.06 points, slightly down 0.08%. The FTSE MIB in Milan fell more sharply, losing 0.56% to 42,949.56 points, highlighting greater weakness in the Italian market. The DAX in Germany also dropped (-0.65% to 22,505.58 points), as did the IBEX 35 in Spain (-0.38% to 16,823.90 points). In contrast, the FTSE 100 in London remained essentially stable, with a slight rise of 0.02% to 9,896.38 points. The pan-European STOXX Europe 600 recorded a minor decrease, confirming a generally cautious sentiment among investors.

Geopolitical misunderstandings and Trump’s "Fake News"

The US president, Donald Trump, declared optimistically that negotiations with Iran are underway to achieve a ceasefire. The tycoon decided to suspend attacks on Iranian energy infrastructure for five days, allowing space for diplomacy and aiming for the reopening of the Strait of Hormuz.

Surprisingly, on the day the ultimatum expired, Trump spoke of “constructive” talks and tangible progress on several key points. According to his statements, around 15 areas of agreement had been identified, including Iran’s commitment not to develop nuclear weapons.

Tehran’s denials

However, Iran denied the US statements, accusing Trump of spreading “fake news” to influence markets and energy prices. The real situation thus appears more uncertain than communicated by Washington. Meanwhile, oil recorded a strong rise: Brent exceeded $102 per barrel (+2.19%), while WTI crude surpassed $90 (+2.68%), supported by fears related to tensions in the region.

Defense stocks decline amid hints of De-escalation

On the stock market front, initial signs of possible de-escalation weighed on defense shares. The worst performers on the Milan Stock Exchange included Fincantieri (-4.67%), Avio (-5.89%), and Leonardo (-4.56%), sliding to the bottom of the main index in line with the overall decline of the FTSE MIB.