European Stocks Head for Lower Open

European stocks traded lower on Tuesday, with the STOXX 50 and STOXX 600 both declining 0.5%, extending the modest losses recorded in the previous session, as developments in the Middle East continued to weigh on market sentiment. Oil prices extended their gains amid renewed concerns over supply disruptions after the US and Iran exchanged further strikes, while President Trump announced plans to impose shipping fees for vessels transiting the Strait of Hormuz. Investors also turned their attention to the start of the corporate earnings season, with ASML Holding scheduled to release its quarterly results on Wednesday. The company's shares edged 0.4%. Travel and leisure stocks were among the worst performers, while the energy sector outperformed, supported by stronger oil prices. Among individual stocks, Siemens (-1.1%), Hermes (-2.0%), SAP (-1.3%), and Banco Santander (-1.0%) declined, whereas Shell (+1.6%), TotalEnergies (+2.0%), and BP (+2.7%) posted solid gains.

European equity markets were set to open lower on Tuesday as investors continued to grapple with escalating tensions in the Middle East following renewed hostilities between the US and Iran. President Donald Trump announced plans to reinstate a blockade on Iranian vessels transiting the Strait of Hormuz and sought reimbursement from countries benefiting from US efforts to secure the vital shipping lane. That sent oil prices sharply higher and fueled concerns over inflation and potential interest rate hikes. Investors also awaited a key US inflation report and earnings from major US banks. In Europe, market participants will monitor German wholesale price data, while the corporate earnings calendar remains light. In premarket trading, Euro Stoxx 50 futures were down 0.4%, while Stoxx 600 futures slipped 0.3%.

Pan-European stock indices closed marginally lower on Monday as the escalation to the war in the Middle East continued to cloud the macroeconomic backdrop for energy importers. The Euro STOXX 50 inched 0.1% down to 6,264 and the STOXX Europe 600 inched 0.1% down to 641. Sovereign yields rose together with energy prices after the US and Iran threatened to restore blockades on vessels leaving the Strait of Hormuz. Banks dropped from the tighter credit conditions, with Santander and Deutsche Bank down more than 1% each. Also, ASML lost 1.8% and Infineon dropped close to 3%, tracking losses for US and Asian counterparts after brokers noted that SK Hynix may miss its earnings guidance. In turn, the traction in oil prices aided energy producers with TotalEnergies and ENI gaining 3% and 4%, respectively.