Key Takeaways

• Modest pullback: The Stoxx 600 dipped 0.2%, Germany’s DAX fell 0.2%, and the U.K.’s FTSE 100 slipped 0.7%, while France’s CAC 40 held mostly flat.
• Talks restarting in Pakistan: Washington and Tehran are reportedly working with mediators on a one-page framework, with discussions set to kick off next week in Pakistan, per the WSJ.
• Month-long process planned: Talks would aim to resolve disputes over nuclear ambitions and sanctions relief, though enrichment and inspections remain key sticking points.
• Trump’s ultimatum: The president said the U.S. operation would end if Tehran “agrees to give what has been agreed to.”
• Wednesday Wall Street rally: U.S. stocks surged on hopes of an imminent end to the war.
• Oil drops further: Brent crude fell 2.4% to $98.83 per barrel as traders bet on Hormuz reopening.
• Hormuz closure context: The strait carrying a fifth of global oil has been effectively shut for much of the conflict.
• Shell stumbles: Shares dipped despite better-than-expected quarterly profit, after the oil giant slashed share buybacks.
• Arm Holdings explodes: Stock soared over 13% after the chip designer revealed a Q1 revenue outlook topping estimates — fresh proof of unstoppable AI chip demand.
• European chipmakers rally: Semiconductor stocks across Europe advanced in Arm’s wake.

European stocks edged lower on Thursday, reversing modest earlier gains, as investors assessed reports that the United States and Iran were working to restart negotiations aimed at ending their ongoing war.

By 05:27 ET (09:27 GMT), the pan-European Stoxx 600 had dipped 0.2%, Germany’s DAX ticked down 0.2%, and the U.K.’s FTSE 100 slipped 0.7%. France’s CAC 40 was mostly unchanged.

Talks Set to Resume in Pakistan

Washington and Tehran have reportedly been working with mediators on a one-page framework designed to once again restart talks over a lasting peace deal. The discussions are expected to kick off next week in Pakistan, according to the Wall Street Journal.

The paper added that a month-long process would then aim to resolve disputes over Iran’s nuclear ambitions and relief from sanctions, although key disagreements remain over areas including nuclear enrichment and inspections.

President Donald Trump has suggested that the U.S. operation against Iran — which Washington launched jointly with Israel in late February — would be over if Tehran “agrees to give what has been agreed to.” Stock markets in the United States ripped higher on Wednesday on fresh hopes that a conclusion to the war was imminent.

Oil Slides Further on Hormuz Hopes

Oil prices also sank as traders cheered the prospect of a reopening of tanker traffic through the Strait of Hormuz, a vital waterway off Iran’s southern coast that handles roughly a fifth of the world’s crude — and which has been effectively closed for much of the conflict. Brent crude futures, the global oil benchmark, were last down 2.4% at $98.83 a barrel on Thursday.

Earnings Move Individual Names

A stream of earnings from European companies is also weighing on sentiment.

Shell’s stock price dipped after the oil giant posted better-than-expected quarterly profit but slashed its share buyback program.

Semiconductor designer Arm Holdings unveiled a first-quarter revenue outlook that topped estimates — marking yet another sign that runaway demand for chips during the artificial intelligence boom is showing no signs of slowing. Chipmaking stocks across Europe advanced in the wake of the announcement.