European Stocks Set for Muted Open

Both the STOXX 50 and the STOXX 600 erased early gains of 1% to trade 0.2% lower on Friday, as market volatility persisted and investors navigated growing uncertainty about the economic impact of the Middle East conflict. Oil prices reversed initial losses and moved higher again, while ongoing strikes in the region continued to fuel supply concerns. Technology and consumer cyclical stocks underperformed, with Roche (-1.7%), SAP (-1.6%), Hermes (-2.3%) declining and Maersk falling more than 4%. In contrast, Infineon stood out, rising 3% to lead the STOXX 600 after JPMorgan upgraded the stock, citing stronger demand tied to AI-driven power technologies. For the week, the STOXX 50 is down 1.7% and the STOXX 600 has fallen 2.1%, marking a third consecutive weekly decline.

European equities advanced on Friday, with the STOXX 50 gaining 1.2% and the STOXX 600 rising 0.9%. The rebound was supported by declining oil prices and followed sharp losses in the previous session, when cautious messaging from central banks across the region dampened investor sentiment. Gains were led by financial and technology stocks. Among the top performers were ASML Holding (+1.6%), HSBC Holdings (+1.1%), LVMH (+1.4%), L’Oréal (+1.4%), Siemens (+1.4%). Unilever added 1.4% as the company is in talks with McCormick & Company to sell its foods business. Also, Infineon stood out, surging 5.1% to lead the STOXX 600 after JPMorgan upgraded the stock, citing stronger demand linked to AI-driven power technologies. On the downside, Maersk (-3.8%), BP (-2.4%), and Repsol (-1.7%) were among the weakest performers. Despite Friday’s rebound, the STOXX 50 is down 1.7% and the STOXX 600 declined 2.1% on the week, marking a third consecutive weekly drop.

European equity markets were poised for a subdued open on Friday as oil prices eased on signs of easing supply risks. US President Donald Trump said Washington is not considering deploying ground troops against Iran, while Treasury Secretary Scott Bessent indicated that officials are weighing the possibility of lifting sanctions on Iranian oil. Israeli Prime Minister Benjamin Netanyahu also stated that Israel would refrain from further attacks on Iranian energy infrastructure. Meanwhile, leaders from the UK, France, Germany, Italy, the Netherlands, Japan, and Canada signaled readiness to support efforts to ensure safe passage through the Strait of Hormuz. On Thursday, European stocks fell after both the European Central Bank and the Bank of England left policy rates unchanged while warning of rising inflation risks. In premarket trading, Euro Stoxx 50 futures were little changed.