European Stocks Poised for Lower Open

European stocks showed mixed performance on Thursday as investors processed the US-Iran interim agreement and hawkish signals from the US Federal Reserve. The STOXX 50 rose 0.3% to a new record of 6,330 points, while the STOXX 600 dipped 0.2% to 638 points. The tentative US-Iran ceasefire, ending the Iran war and reopening the Strait of Hormuz, drove oil prices to three-month lows, easing inflation concerns. Meanwhile, the US Federal Reserve kept interest rates unchanged, but new Fed Chair Kevin Warsh hinted at a potential rate hike to curb inflation. Later, the Bank of England is expected to maintain rates, with policymaker dissent under scrutiny for any hawkish shifts. In individual stocks, BE Semi fell 0.4% despite raising long-term revenue and margin targets. Volkswagen dropped 0.5% amid reports of complications at its Osnabrueck plant tied to a key shareholder, while UniCredit gained 0.4% after approaching Delfin about increasing its Generali stake. Generali shares jumped 2.6%.

European equity markets were poised to open lower on Thursday as investors remained cautious after the US Federal Reserve signaled growing support for rate hikes later this year. Market participants also looked ahead to the Bank of England’s policy decision, where it is widely expected to keep interest rates unchanged at 3.75%. Meanwhile, the Swiss National Bank is also anticipated to leave its policy rate steady at 0%. On the geopolitical front, President Donald Trump signed an interim peace agreement with Iran that paves the way for the reopening of the crucial Strait of Hormuz. The deal also includes the lifting of sanctions on Iranian oil exports, while negotiations on nuclear issues and potential additional economic incentives for Iran will follow. In premarket trading, Euro Stoxx 50 and Stoxx 600 futures were both down about 0.5%.

European stock indices rose for a fifth session to new records on Wednesday with further support from softer pro-inflationary risks. The Euro STOXX 50 rose by 0.6% to 6,297 and the STOXX Europe 600 rose 0.5% to 639. Sovereign yields fell further as Iran and the US maintained their intent to sign an agreement that restores energy trade from the Middle East this Friday. Energy prices pulled back and scaled down expectations that the ECB would be forced to raise interest rates this year. Banks led the gains for another session amid the improved credit outlook, with Santander, UniCredit, and Deutsche Bank gaining 2.5%. On the other hand, BMW shares fell more than 6% after the carmaker cut its guidance, citing worsening conditions in the Chinese market and the broader impact of the Middle East conflict.