European equities moved modestly lower on Thursday as investors remained cautious amid persistent tensions around the Strait of Hormuz, despite U.S. President Donald Trump extending the Iran ceasefire indefinitely.
As of 07:05 GMT, the pan-European Stoxx 600 was down 0.4%, Germany’s DAX had slipped 0.5%, and the U.K.’s FTSE 100 declined 0.6%.
France’s CAC 40 stood out, rising 0.3%, supported by strong gains in L’Oréal (EU:OR), which reported its fastest quarterly growth in two years. The stock jumped more than 8%, even as concerns persisted about the potential impact of the Iran conflict on consumer demand.
Market participants were also watching for signs of renewed diplomacy between Washington and Tehran. Trump told U.S. media that fresh negotiations are “possible” as early as Friday.
Earlier in the week, the president said in a social media post that the ceasefire had been extended just hours before its expected expiry, following a request from Pakistan, which has been acting as an intermediary. Trump added that the truce would remain in place “until such time as” Iran delivers a “unified proposal” for peace.
Still, prospects for talks remained uncertain. Shortly after the announcement, Iran attacked three vessels and seized two near the Strait of Hormuz, in response to an ongoing U.S. blockade of its ports and coastline.
Concerns over potential supply disruptions through the strait—responsible for roughly 20% of global oil flows—pushed crude prices back above $100 per barrel. Although prices have retreated from the sharp surge seen after the conflict began in late February, they remain elevated compared with pre-war levels.
Investors are also awaiting Eurozone business activity data later in the day, which could provide insight into how companies are coping with energy-related pressures.
Earnings deluge
Some analysts noted that markets may be shifting focus away from the steady stream of geopolitical developments and turning instead toward corporate earnings and increased spending on artificial intelligence infrastructure.
Shares in Essity (BIT:1ESSI) rose after the group reported quarterly core earnings above expectations, supported by higher volumes that helped offset weaker pricing. The company’s CEO told Reuters it plans to raise prices to counter rising energy costs.
However, Sainsbury’s (LSE:SBRY) warned that the conflict could dampen consumer spending, weighing on its outlook. Its shares fell more than 5%.
In contrast, Safran (EU:SAF) edged higher after posting stronger-than-expected first-quarter revenue and reaffirming its 2026 outlook.
Meanwhile, Sanofi (LSE:SAN) also exceeded forecasts for both profit and revenue in the first quarter, driven by continued demand for its asthma and eczema treatment Dupixent, lifting the stock by over 2%.
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