European Stocks Hit Record Highs on US-Iran Deal

European stocks climbed to fresh record highs on Tuesday, supported by strong corporate earnings, AI-related shares, and improving global risk sentiment. The STOXX 50 rose 1% to 6,488, while the STOXX 600 gained 0.8% to 657. A sharp drop in oil prices, driven by optimism over Middle East peace negotiations, further lifted equities by easing inflation concerns and reducing expectations of tighter monetary policy. AI-related stocks led gains after Palantir raised its revenue outlook, with BE Semiconductor jumping 7.6% after a Berenberg upgrade, while ASML and Infineon gained 3.4% and 3.2%, respectively. Among earnings movers, Bayer rose 2.9% after beating quarterly estimates. BP fell 4.6% as lower oil prices overshadowed stronger-than-expected earnings, while HSBC slipped 0.2% despite solid results. Zalando tumbled 11.7% after cutting full-year guidance, Lufthansa lost 9% after lowering its outlook, and Hugo Boss was little changed despite reporting sharp declines in sales and EBIT.

European stocks climbed to fresh record highs on Tuesday as improving global risk sentiment and upbeat corporate earnings outweighed a rebound in oil prices following Monday's sharp decline amid lingering uncertainty over the US-Iran conflict. The Euro Stoxx 50 rose 0.7% to 6,480, while the broader STOXX 600 gained 0.6%. AI-related stocks advanced after Palantir topped expectations and raised its revenue outlook, with BE Semiconductor gaining 2% following an upgrade from Berenberg. Among earnings movers, Bayer rose 4% after beating Q2 estimates and reaffirming its 2026 sales outlook. BP added 1% after reporting stronger-than-expected profits, while HSBC gained 0.3% after beating earnings forecasts and raising its net interest income target. On the downside, Zalando tumbled 9% after cutting its full-year guidance, Lufthansa lost 4% after missing profit expectations and lowering its outlook, while Hugo Boss slipped after reporting sharp declines in both sales and EBIT.

European equity markets were on track to open higher on Tuesday, with major indexes poised to reach fresh record highs as global risk appetite improved and the recent selloff in semiconductor and other artificial intelligence-related stocks showed signs of fading. Investors also prepared for another round of economic data and corporate earnings, including France’s budget balance and Italy’s retail sales reports. On the corporate front, UK oil major BP Plc reported its strongest quarterly profit in more than four years, driven by robust refining and trading operations during the Iran war. German pharmaceutical company Bayer AG also surprised markets with a rise in second-quarter profit, supported by solid performance in its crop science division. Other major earnings due later today include HSBC Holdings, Continental and Lufthansa. In premarket trading, Euro Stoxx 50 and Stoxx 600 futures both advanced about 0.4%.