European Stocks Poised for Lower Open

European equity markets were on track to open lower on Tuesday, retreating from record highs as lock in profits while monitoring the latest developments in the Middle East. The US military reportedly targeted missile launch sites and vessels suspected of attempting to deploy mines in southern Iran, with US Central Command saying the operations were aimed at protecting American troops in the region. Meanwhile, President Donald Trump said talks with Tehran were progressing well, though he warned that further attacks could follow if negotiations broke down. With no major economic data releases or corporate earnings reports due in Europe on Tuesday, geopolitical developments remained the primary focus for markets. In corporate news, Ferrari unveiled its first fully electric vehicle, the Ferrari Luce, priced at €550,000. In premarket trading, Euro Stoxx 50 futures fell 0.4%, while Stoxx 600 futures were down 0.8%.

European stocks closed sharply higher on Monday, the highest since their record highs in late February on signals that the US and Iran could soon agree to a deal that would restore energy exports from the Middle East. The Eurozone's STOXX 50 gained 2% to 6,139 and the pan-European STOXX 600 added 1.1% to 632. US President Trump stated that negotiations with Iran proceeded favorably during the weekend and Secretary of State Rubio signaled a degree of optimism on an incoming deal, driving oil prices to decline sharply and supporting European sovereign bonds. Banks benefited sharply from the rally for bonds, with Santander, BBVA, and Deutsche Bank adding more than 4%. The drop in power prices also aided margins for industrial giants, with Safran soaring 6% while Schneider added 3.5%.

European stocks opened the week on a strong note, with the STOXX 50 climbing 1.1% and the STOXX 600 rising 0.6% to near three-month highs, as investors grew increasingly optimistic about a US-Iran agreement that could reopen the Strait of Hormuz. President Trump said negotiations with Iran were “proceeding in an orderly and constructive manner,” while adding that he was “in no rush” to secure a final deal. At the same time, senior US officials signaled that Washington and Tehran were edging closer to an agreement that would restore access to the key shipping route. The prospect of easing geopolitical risks pushed oil prices sharply lower. Banks led the gains, with BBVA rising 2.5%, Santander up 2%, UniCredit advancing 2%, and BNP Paribas adding 1.7%. Industrial stocks also performed strongly, including Safran (+5.1%) and Siemens (+1.9%), while airlines rallied on the back of lower fuel prices, namely Lufthansa (+4.1%) and Air France-KLM (+7.6%).