European Stocks Rebound

Stocks in Europe moved higher on Tuesday, with the STOXX 50 up 0.4% and the STOXX 600 gaining 0.3%, after a lacklustre open. Falling oil prices helped lift sentiment, as renewed hopes for a diplomatic solution to the conflict with Iran emerged. Kyodo News reported that Tehran had proposed reopening the Strait of Hormuz within seven days of the blockade being lifted, potentially providing a basis for talks during the UN General Assembly. US President Trump is due to address the assembly in New York and may meet Iranian President Masoud Pezeshkian on the sidelines. Software and retail stocks were among the strongest performers. Prosus (5.5%) was among the top performers, Adidas as also gaining nearly 3% and Inditex went up 1.8%. In contrast, insurance and energy stocks were mostly in the red, including Allianz (-2%) and BP (-1.8%).

European stocks were subdued on Tuesday, with both the STOXX 50 and STOXX 600 hovering around the flatline after gaining nearly 1% in the previous session. The technology rally seen in the US overnight failed to carry over into European markets, while oil prices edged higher following a four-session losing streak. Investors continued to monitor developments on the diplomatic front, particularly efforts to end the conflict with Iran. US President Trump is due to address the United Nations General Assembly later today and has left open the possibility of meeting with Iranian President Masoud Pezeshkian. Among the largest companies, ASML (-0.2%), HSBC (-0.8%), Banco Santander (-0.6%) and Allianz (-2.9%) traded lower, while Shell (+0.8%) and TotalEnergies (+1%) moved higher. The software sector was firmer, led by Prosus (+3.7%), while automakers and pharmaceutical stocks were under pressure.

European equity markets were set to open slightly higher on Tuesday, building on the previous session’s gains after an AI-led rally on Wall Street boosted optimism over semiconductor demand. The rally followed renewed enthusiasm around Meta’s AI agent, Muse, easing concerns about a slowdown in AI development and supporting demand for chips powering the technology. Market sentiment was also lifted by expectations for a summit between Presidents Donald Trump and Xi Jinping this week, along with hopes for talks between Trump and his Iranian counterpart and other Gulf leaders. In Europe, investors will focus on UK public sector borrowing and Spain’s trade data, alongside earnings from British companies Smiths and Kingfisher. In premarket trading, Euro Stoxx 50 and Stoxx 600 futures were both up about 0.1%.