European Stocks Head for Fresh Records

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%.

European stocks rose to record highs on Monday as lower energy prices drove benchmark borrowing costs to drop. The Euro STOXX 50 gained 1.2% to close at 6,440 and the STOXX Europe 600 gained 0.4% to 652. Oil and natural gas prices fell sharply after the US refrained from attacking Iran over the weekend and US President Trump signaled willingness for a ceasefire. Sovereign yields fell and softened soaring credit costs, aiding banks and insurers with UniCredit, Santander, BBVA, and BNP Paribas gaining over 2%. Meanwhile, Intesa Sanpaolo rose 2.4% as talks between Banca MPS and Banco BPM for a merger of equals collapsed, reigniting Intesa's odds for an acquisition of the latter. Software companies also closed higher, tracking US counterparts with SAP adding 4.4%. Meanwhile, Deutsche Telekom rose 5% ahead of its earnings.