Mucahithan Avcioglu
10 June 2026•Update: 10 June 2026
European stock markets closed mostly lower on Wednesday as renewed tensions between the US and Iran weighed on investor sentiment, while market participants awaited the European Central Bank's policy decision.
The pan-European Stoxx Europe 600 slipped 0.08% to close at 618.17 points, marking its fourth consecutive daily decline as geopolitical risks and inflation concerns continued to shape trading.
Germany's DAX 40 fell 0.97% to 24,195.31 points, France's CAC 40 lost 0.51% to 8,161.83, and Italy's FTSE MIB 30 declined 0.46% to 50,029.17.
The UK's FTSE 100 bucked the broader trend, rising 0.27% to 10,254.81 points, supported by gains in energy and consumer staples stocks as oil prices remained elevated amid Middle East tensions.
The euro/dollar parity traded at 1.1546 as of 1740GMT, up 0.05%.
Market sentiment weakened after tensions between Washington and Tehran escalated. Following the downing of a US helicopter, President Donald Trump said the US would strike Iran and defended Washington's right to do so.
“We hit them hard yesterday and we're going to hit them hard again today,” Trump said.
The latest escalation pushed investors toward a more cautious stance, with energy security concerns returning to the forefront of market pricing. Brent crude traded near $95 per barrel, while disruptions around the Strait of Hormuz kept inflation risks elevated.
Investors are also focused on Thursday's European Central Bank meeting. Money markets are pricing in a rate hike, as higher energy costs resulting from the near-halt in flows through the Strait of Hormuz are expected to add upward pressure to inflation.
Analysts said the ECB faces a difficult policy environment, balancing weak growth signals in parts of Europe against renewed energy-driven price pressures.
Germany, the eurozone's largest economy, remains particularly exposed to the energy shock, while concerns over industrial activity and external demand continued to weigh on the DAX.
On the macroeconomic front, US consumer inflation data released Wednesday showed the Consumer Price Index rose 0.5% month-on-month and 4.2% year-on-year in May, in line with market expectations.
The annual rate marked the strongest increase since April 2023, with energy costs linked to the Middle East conflict drawing close attention from investors.
Analysts said the inflation data reinforced expectations that the Federal Reserve could keep monetary policy tight for longer, even though the figures did not exceed forecasts.
The combination of rising oil prices, persistent geopolitical uncertainty and expectations of tighter monetary policy limited risk appetite across European equities.
