Noor Trends News, Technical Analysis, Educational Tools and Recommendations
European stocks took a sharp downturn on Thursday, while crude oil prices surged, following Israel’s large-scale airstrikes on Iran. The strikes ignited concerns over the potential for regional escalation and the impact on global growth.
At 03:02 ET (07:02 GMT), the DAX index in Germany dropped 1.4%, the CAC 40 in France slid 1.2%, and the FTSE 100 in the U.K. fell 0.5%, retreating from its record closing high on Thursday.
Market Sentiment Weighed Down by Israel’s Strike on Iran
The market sentiment was heavily influenced by Israel’s preemptive airstrikes on Iran early Friday, targeting “dozens” of military and nuclear sites. This move prompted Israel to declare a state of emergency, with warnings of an imminent missile and drone retaliation from Tehran. Iran’s state media also reported unconfirmed claims that Israel had killed Hossein Salami, the commander of Iran’s Revolutionary Guards.
In response, Iran pledged a “harsh” retaliation against both Israel and the U.S. U.S. Secretary of State Marco Rubio confirmed that Israel acted independently, citing self-defense as the driving motive behind the strikes.
The White House had earlier warned of considering military measures if nuclear negotiations with Iran failed, with a key deadline for responses having passed on Thursday. These developments reignited fears about the disruption of Middle Eastern oil flows and global economic stability, adding to already fragile market sentiment driven by ongoing trade uncertainties.
Trump Hints at Potential New Auto Tariffs
U.S. President Donald Trump further added to the trade concerns on Thursday, hinting at the possibility of raising auto tariffs soon. This statement came just a day after he had declared that the U.S.-China trade deal was “done.”
Trump also stated that he would send letters to major U.S. trading partners in the coming two weeks, outlining his planned trade tariffs, with a July 9 deadline to finalize trade agreements. The prospect of more trade tensions weighed on investor sentiment, particularly in the context of the already fragile trade environment.
Subdued Inflation Data in Germany and France
On the European economic front, inflation data from Germany and France showed subdued price pressures. German inflation dropped to 2.1% in May, matching the preliminary data and down from 2.2% in April. In France, consumer inflation retreated to 0.7% year-over-year in May, down from 0.8% in April, reflecting low inflationary pressure in the eurozone’s second-largest economy.
The sharp decline in European equities and the surge in crude prices were driven by rising geopolitical tensions following Israel’s airstrike on Iran, which raised fears of further escalation and disruptions to global oil supply. Meanwhile, trade concerns were exacerbated by President Trump’s comments on potential new auto tariffs, adding to market uncertainty. Economic data from Germany and France showed subdued inflation, but the overall sentiment remained fragile due to ongoing global geopolitical and trade risks.
