European Stocks Poised for Muted Open

European stocks edged higher on Friday, attempting to recover from losses of more than 1% in the previous session. Investors continued to monitor developments in the Middle East, with oil prices easing on the day but remaining at elevated levels. Market participants also assessed the latest trade measures announced by President Trump, who imposed tariffs ranging from 10% to 12.5% on imports from most major trading partners following an investigation into alleged failures to prevent forced labor in supply chains. The tariff applied to the EU is expected to remain capped at 10%. On the macroeconomic front, flash PMI readings for France and Germany came in above expectations, providing additional support to sentiment. Meanwhile, the earnings season remained in focus. SAP surged more than 5% after raising its 2026 adjusted profit guidance. In contrast, VW fell around 2% after abandoning its expectation for sales revenue growth in 2026.

European equity markets were set to open little changed on Friday after posting their steepest one-day decline in over two weeks in the previous session, as investors weighed elevated oil prices and fresh US tariffs. Brent crude held above $100 a barrel after escalating Middle East tensions heightened fears of deeper supply disruptions. Investors also assessed fresh US tariffs of 10%-12.5% on imports from most major trading partners, adding to uncertainty over the global trade outlook. Meanwhile, technology stocks were expected to remain under pressure, tracking the AI-driven selloff on Wall Street and in Asia. Attention now turns to the UK's retail sales data, Germany's GfK consumer confidence survey, and flash PMI readings across the region for fresh clues on economic momentum. In premarket trading, Euro Stoxx 50 and Stoxx 600 futures were broadly flat.

European stocks closed sharply lower on Thursday, as the surge in energy prices risked higher interest rates in the Eurozone, while markets parsed a series of earnings results. The Euro STOXX 50 fell 1.7% to 6,210 and the STOXX Europe 600 dropped 1.3% to 638. UniCredit sank 4.8% despite posting results that reflected a strong quarter, as its ambition to acquire Germany's Commerzbank jeopardized its share buyback program. Meanwhile, BNP Paribas lost 2.8% despite beating profit estimates, tracking other banks after amid tighter financial conditions. The ECB held rate unchanged, as expected, and signaled that pro-inflationary risks may warrant more rate hikes in the future. Such risks were consolidated by a surge in gas prices as escalation to the US-Iran war further dented tanker flows from the region. Meanwhile, luxury stocks fell with LVMH, Hermes, and Ferrari dropping over 3.5%, pressured by poor results from Moncler.