Key Takeaways

• Broad sell-off: The Stoxx 600 fell 1.2%, Germany’s DAX dropped 1.4%, the U.K.’s FTSE 100 shed 1.1%, and France’s CAC 40 slid 1.1%.
• Trump’s grim warning: The president said the U.S.-Iran ceasefire is on “massive life support.”
• Verbal blast continues: Trump called Iran’s counteroffer “unacceptable” and “a piece of garbage.”
• Iran defends offer: Tehran described its counteroffer as “generous and responsible,” focused on reopening Hormuz.
• Hormuz still shuttered: The vital waterway has been effectively closed for weeks, choking global oil flows.
• BCA’s view: Chief Strategist Felix Vezina-Poirier says “any normalization of Hormuz shipping now looks delayed.”
• Oil resumes climb: Brent crude rose 2.0% to $106.30 per barrel, well above pre-war levels of around $70.
• Inflation fears mount: The crude surge is fueling worries about rate hikes from central banks.
• Bond yields rise: European government bond yields climbed, adding pressure on stocks.

European stocks opened lower on Tuesday, weighed down by few indications that the United States and Iran are nearing a permanent peace deal.

By 03:04 ET (07:04 GMT), the pan-European Stoxx 600 had fallen 1.2%, Germany’s DAX had slid 1.4%, the U.K.’s FTSE 100 had shed 1.1%, and France’s CAC 40 was down 1.1%.

Trump’s Grim Diagnosis Drags on Sentiment

Dampening sentiment were comments from U.S. President Donald Trump, who told reporters on Monday that the fragile ceasefire between Washington and Tehran was on “massive life support.”

Earlier, Trump rebuffed Iran’s response to the American proposal to end the fighting, describing it as “unacceptable” and later as a “piece of garbage.”

Tehran, for its part, said that its counteroffer was “generous and responsible,” with most of the focus on reopening the Strait of Hormuz. The narrow conduit off Iran’s southern coast has been effectively shuttered for weeks — crimping global oil supply flows and stoking fears of a global energy crisis.

Oil and Yields March Higher

Oil prices resumed their climb. Brent crude futures, the global benchmark, were last higher by 2.0% at $106.30 a barrel — well above pre-war levels of around $70 a barrel. This uptick has, in turn, fed worries over a surge in inflation and reinforced expectations that central banks will respond by hiking interest rates.

European government bond yields, which tend to move inversely to prices, also rose — exerting additional downward pressure on equities across the continent.