European Stocks Pull Back

European stocks closed firmly lower on Thursday, trimming gains from the previous session despite another session of decline in energy prices, as markets assessed a batch of corporate developments and awaited clarity on potential peace in the Middle East. The Eurozone's STOXX 50 fell 0.9% to 5,973 and the pan-European STOXX 600 fell 1% to 617. Iran had still not delivered an answer to the US's memorandum that would end the war and gradually restore trade through the Persian Gulf, extending the pullback in energy prices from yesterday. Still, a group of pessimistic earnings report prevented gains. Rheinmetall dropped 7% after profits for the first quarter were unable to meet analysts' ambitious expectations. Also, Enel fell 2% after posting its results. On the broader index, Shell tanked 3% after posting earnings, adding to the pressure from lower oil prices.

European stocks extended gains for a third consecutive session on Thursday, with the STOXX 50 rising 0.4% and the STOXX 600 adding 0.2%, as traders monitored developments in the US-Iran conflict, particularly whether Iran would accept the US proposal. US President Trump said no deal had been finalized, adding that it was “perhaps a big assumption” to expect Iran to accept the proposal. He also warned that military strikes could resume if Tehran failed to comply. Investors were also focused on the earnings season. Shares of Shell fell 3% after the company reported a sharp increase in earnings but warned of lower production due to disruptions linked to the Middle East conflict. Maersk also declined 3%, despite posting stronger-than-expected profits while maintaining its outlook unchanged. Meanwhile, gains in major heavyweight stocks helped support the broader market, with ASML Holding rising 1%, Roche adding 0.3%, and LVMH advancing 1.8%.

European equity markets were set to open higher on Thursday, marking a third consecutive session of gains as rising optimism over a potential US-Iran peace agreement pushed oil prices sharply lower and eased inflation concerns. Investors also focused on another wave of corporate earnings reports. UK energy major Shell exceeded quarterly profit expectations as the Middle East conflict contributed to higher energy prices during the period. Swiss Re also posted stronger-than-expected first-quarter net income, supported by lower natural catastrophe claims and improved investment returns. Meanwhile, Siemens Healthineers missed second-quarter revenue estimates, while Engie reported a decline in first-quarter earnings. In premarket trading, Euro Stoxx 50 futures rose 0.1%, while Stoxx 600 futures gained 0.2%.