European stocks are expected to open mostly lower on Tuesday as investors react to escalating tensions in the Iran war and its impact on global markets. According to data from IG, the U.K.'s FTSE index is projected to open flat, while Germany's DAX and France's CAC 40 are both seen down 0.4%, and Italy's FTSE MIB is expected to be 0.1% lower [1].
The market downturn follows a series of developments on Monday, including a fragile ceasefire between the U.S. and Iran appearing close to collapse. The United Arab Emirates was attacked by Iranian drones and missiles, and the U.S. reported sinking Iranian boats in the Strait of Hormuz [1]. President Donald Trump warned Iran in a Fox News interview that it would be "blown off the face of the earth" if it targeted U.S. ships protecting commercial vessels in the strait. Trump also stated on Truth Social that a South Korean cargo ship had come under fire from Iran, suggesting that South Korea should join the mission [1].
Stock market indices closed sharply lower on Monday, and oil prices rose amid fears that the conflict could be prolonged, potentially triggering a global recession. However, oil prices declined overnight as traders reassessed the situation, though markets remained jittery due to ongoing Iranian attacks [1].
In addition to geopolitical concerns, earnings reports are in focus, with Anheuser-Busch InBev, Intesa Sanpaolo, Ferrari, Novonesis, Geberit, Banco BPM, Covestro, and Fresenius Medical Care all scheduled to report on Tuesday. Earlier in the day, HSBC, Europe's largest lender, reported a first-quarter pretax profit of $9.4 billion, slightly below analysts' expectations [1].
CONCLUSION
Escalating tensions in the Iran war have led to a negative outlook for European stocks, with major indices expected to open lower and markets remaining volatile. The combination of geopolitical risks and key earnings reports is likely to keep investor sentiment cautious in the near term.