Key insights
- European stocks edged lower due to rising oil prices from Middle East tensions, impacting airlines and auto sectors. However, strong retail performance, led by Inditex, provided some support. While the direct impact on US equities is limited, escalating geopolitical risks and their effect on energy prices can indirectly influence inflation expectations and consumer spending, potentially creating headwinds for US markets if tensions persist.
June 3 (Reuters) - European shares fell marginally on Wednesday as renewed hostilities in the Middle East sent oil prices higher and dampened expectations for an imminent peace deal, while Zara owner Inditex gained after reporting a strong start to the summer.
The pan-European STOXX 600 index dipped 0.1% to 624.32 points by 0805 GMT.
Tensions in the Middle East escalated as the U.S. military said it thwarted Iranian missile attacks on Bahrain, Kuwait and other regional targets, sending Brent crude prices up 2%.
However, U.S. President Donald Trump’s comments that talks with Iran were ongoing kept losses in check.
Energy price-sensitive airlines such as Lufthansa and Air France slipped 1% each, while auto stocks led sectoral declines with a 1.2% drop.
Among other stocks, Inditex jumped nearly 5% after the Spanish company reported a strong start to summer trading.
The broader retail sector climbed 2% and gained the most among sectors.
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