European Markets Close Tuesday Mixed
The continent's broadest equity benchmark, the Stoxx Europe 600, retreated 0.5% to close at 618.64 points.
Among the region's major losers, Germany's DAX 40 shed 0.75%, settling at 24,433.06, while London's FTSE 100 bore the steepest decline, dropping 1.41% to finish at 10,227.33 — with banking stocks accounting for a particularly sharp portion of the capital's losses.
Bucking the downward trend, France's CAC 40 edged up 0.05% to 8,203.43, and Italy's FTSE MIB 30 posted a modest gain of 0.11%, closing at 50,262.76.
On the currency markets, the euro strengthened slightly against the dollar, with the EUR/USD pair rising 0.12% to 1.1553 as of 1740 GMT.
The worst of the day's selling pressure — triggered by escalating Israeli and Iranian strikes that threatened to derail regional peace efforts — showed signs of easing, as growing confidence that the conflict would not spiral into a broader war helped stabilize sentiment.
Brent crude futures tumbled 4.92% from the prior session's close to $89.61 per barrel as of 1612 GMT, as improving prospects for a diplomatic resolution between Washington and Tehran cooled supply-disruption fears. US benchmark West Texas Intermediate traded at $86 per barrel.
Attention is now firmly trained on Thursday's interest rate decision from the European Central Bank. A rate hike is widely anticipated, though markets have revised their expectations for ECB rate cuts, pushing the projected timeline back from March 2027 to mid-2027.
On the data front, Germany offered a rare bright spot Tuesday, with figures showing industrial output expanded 0.4% month-on-month in April.
Adding to the cautious backdrop, Fitch Ratings downgraded its global economic sector outlook for the current year to "deteriorating" from "neutral," directly attributing the revision to the cascading economic fallout from the ongoing US-Israel-Iran conflict.
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