Global Economy
European Markets Slip as Middle East Tensions Spike Oil Prices
European equities opened lower on Wednesday, with the CAC 40, DAX and FTSE 100 all posting losses amid fresh flare‑ups between Washington and Tehran. The renewed closure of the Strait of Hormuz and the threat of additional export‑gate blockades have pushed oil prices up, rekindling inflation worries that had eased in June. Technology and luxury stocks were the only bright spots – ASML surged after raising its 2026 guidance, while Richemont and other high‑end brands posted solid quarterly results.
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European indices slide at open
At 07:26 GMT, the CAC 40 was down 0.5% at 8,324.73 points, Germany's DAX fell 1.13%, and the UK’s FTSE 100 slipped 0.75%.
The broader EuroStoxx 50 lost 0.19%, the FTSE Eurofirst 300 dropped 0.29% and the Stoxx 600 slipped 0.31%.
Geopolitical backdrop
Heightened tensions between Washington and Tehran continue after another night of mutual strikes, and the Strait of Hormuz was once again shut to oil flows. Iranian Revolutionary Guard officials warned on Wednesday they could block additional "export corridors that benefit the United States and its allies," adding fresh uncertainty to the market.
Even though the oil‑price rally looks limited for now, higher crude prices revive inflation concerns. Investors fear that the June‑month easing in inflation may be short‑lived if the conflict escalates further.
Sector highlight: Technology
ASML, the world’s leading supplier of semiconductor‑manufacturing equipment, jumped 5.5% after it upgraded its 2026 financial outlook. The rally lifted fellow Dutch‑listed peers ASM International (NASDAQ:ASMI) and BE Semiconductor Industries (NASDAQ:BESI).
The technology sub‑index of the Stoxx 600 outperformed the market, gaining 1.3%.
Sector highlight: Luxury
Swiss luxury conglomerate Richemont rose 6.2% following a stronger‑than‑expected first‑quarter earnings report. French luxury groups Kering, Hermès and LVMH each advanced more than 2%, helping the luxury sector as a whole to climb 2.1%.
With Reuters reporting the latest developments, market participants will be watching the geopolitical situation closely for any further impact on equities.