European Stocks Snap 3-Session Winning Streak

European stocks moved lower on Thursday, snapping a three-session winning streak, as uncertainty surrounding Middle East peace talks weighed on sentiment. The STOXX 50 declined 0.8%, while the STOXX 600 fell 0.7%. Conflicting signals from Washington and Tehran added to market unease. The US indicated that discussions over a proposed peace plan are underway, whereas Iran denied any direct engagement with Washington. Meanwhile, rising oil prices continued to fuel inflation concerns, adding further pressure on equities. Technology and industrial stocks led the declines, with ASML Holding dropping 2.4% and Siemens Energy losing 2.9%. Thyssenkrupp fell 3.5%, while Rheinmetall slipped 2.4%. Also, H&M plunged nearly 6% after reporting weaker first-quarter sales. On the upside, NEXT surged almost 7%, leading the STOXX 600, following strong profit and sales growth.

European equity markets were set for a lower open on Thursday, snapping a three-day rebound as traders weighed conflicting reports surrounding US-Iran ceasefire talks. The US maintained that peace negotiations are ongoing, while Iran signaled it has no intention of holding direct talks with Washington. Tehran said it would reject a US ceasefire offer, instead countering with a five-point plan granting it control over the Strait of Hormuz. In Europe, investors will focus on Germany’s GfK consumer sentiment survey, along with business and consumer sentiment readings from France and Italy. In premarket trading, Euro Stoxx 50 and Stoxx 600 futures were down 0.8% and 0.7%, respectively.

European equities closed firmly higher on Wednesday, extending their rebound this week as signs that the US aims to de-escalate the conflict with Iran dimmed concerns of energy-fueled inflation. The Eurozone's STOXX 50 gained 0.6% to 5,627 and the pan-European STOXX 600 jumped 1.2% to 586. The US outlined points for a ceasefire with Iran, which was rejected by Tehran, but the signal that Washington aims to ease the conflict and prioritize economic health by lower energy prices supported risk assets across the globe. Banks led the rebound as the support for European government bonds eased concerns of weaker balance sheets, lifting ING, Deutsche Bank, Santander, and BBVA by over 2%. Industrial companies and chemicals producers also rose as a fourth straight session of decline in natural gas prices aided their margin outlooks, with Schneider, BASF, and Siemens Energy gaining between 4.5% and 2.5%. Also, Grifols rose 1.5% as it will IPO its US biopharma business.