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  • European Stocks Rise Slightly as Middle East Tensions Persist; Bayer Weighs on Sentiment: DAX, CAC, FTSE100

    European Stocks Rise Slightly as Middle East Tensions Persist; Bayer Weighs on Sentiment: DAX, CAC, FTSE100

    European equity markets traded modestly higher on Wednesday as investors continued to monitor developments in the Middle East while digesting a fresh wave of corporate earnings.

    At around 08:05 GMT, Germany’s DAX advanced 0.6%, France’s CAC 40 gained 0.5%, and the U.K.’s FTSE 100 edged up 0.1%.

    Conflict in the Middle East remains in focus

    Military activity involving the United States, Israel and Iran continued overnight. U.S. Admiral Brad Cooper, commander of American forces in the region, said Iran’s air defence capabilities had been significantly weakened and that its navy had lost operational control of key waterways after 17 vessels were destroyed. He also stated that more than 2,000 Iranian targets had been struck.

    At the same time, Israel continued strikes against the Iran-backed Hezbollah group in neighbouring Lebanon after militants launched attacks in retaliation for the death of Supreme Leader Ayatollah Ali Khamenei during the initial strikes on Saturday.

    Iran has also launched missiles and drones toward neighbouring Arab countries hosting U.S. military bases, widening the scope of the conflict across the region.

    “Energy prices have soared over the last couple of days, especially European gas, and this is preventing bonds/yields from acting as circuit breakers,” said analysts at Vital Knowledge. “If energy holds at present levels, it will create a major headwind for consumers globally.”

    “Looking beyond the immediate term, lurking in the background is the potential for the Iran campaign to yield a medium and long-term positive outcome for equities by finally ending a war” that began back in 2023.

    Corporate results in focus

    Alongside geopolitical developments, investors were also focused on corporate earnings from several major European companies.

    Bayer (TG:BAYN) disappointed the market after issuing a 2026 profit outlook below expectations, as the German pharmaceutical group continues to face expensive litigation and a heavy debt burden.

    German automotive supplier Continental (TG:CON) said it expects largely stable sales and profitability in its core tyre division in 2026, citing ongoing volatility in demand.

    Sportswear company Adidas (TG:ADS) forecast operating profit of around €2.3 billion this year, despite anticipating roughly €400 million in negative effects from U.S. tariffs and adverse currency movements.

    French reinsurer SCOR (EU:SCR) reported stronger-than-expected fourth-quarter net income, supported by solid underwriting results in both property and casualty as well as life and health operations.

    In the U.K., Metro Bank (LSE:MTRO) announced underlying pre-tax profit of £98 million for 2025, marking the highest level in the lender’s 15-year history and surpassing its cost-cutting targets.

    Meanwhile, Traton (BIT:18TRA) proposed a dividend for fiscal year 2025 at roughly half the level paid the previous year after the Volkswagen-owned truckmaker reported a steep decline in earnings tied to a sharp downturn in its North American business and the impact of U.S. tariffs.

    Eurozone data awaited

    On the macroeconomic front, investors are watching for the release of February services PMI data as well as the latest unemployment figures for the eurozone.

    However, the data may have limited impact on European Central Bank policy expectations, particularly after figures released Tuesday showed eurozone inflation unexpectedly accelerated last month.

    Inflation across the 21 countries using the euro rose to 1.9% from 1.7% the previous month, exceeding forecasts of 1.7%. Price pressures could intensify further if the Middle East conflict continues to drive energy prices higher.

    Financial markets currently expect the ECB to keep its deposit rate unchanged at 2% for the time being, though the possibility of a rate increase later in the year is beginning to emerge.

    Oil prices extend rally

    Oil prices continued to climb on Wednesday as escalating tensions in the Middle East raised fears of supply disruptions.

    Brent crude futures jumped 2.9% to $83.78 per barrel, while U.S. West Texas Intermediate crude gained 2.6% to $76.51 per barrel.

    Both benchmarks had already risen nearly 5% in the previous session after gaining about 7% on Monday. The Brent contract has now reached its highest level since July 2024.

    According to Reuters, Iraq—the second-largest producer within the Organization of the Petroleum Exporting Countries—has reduced production by roughly 1.5 million barrels per day due to storage constraints and limited export routes.

    Meanwhile, Iran has targeted tankers passing through the Strait of Hormuz, a critical route that handles about one-fifth of global oil and liquefied natural gas shipments, effectively halting traffic for a fourth consecutive day.

  • Wall Street Set for Renewed Declines as Middle East Crisis Deepens: Dow Jones, S&P, Nasdaq, Futures

    Wall Street Set for Renewed Declines as Middle East Crisis Deepens: Dow Jones, S&P, Nasdaq, Futures

    U.S. stock futures are signaling a sharply weaker open on Tuesday, pointing to another bout of early selling after markets clawed back heavy initial losses to finish Monday on a mixed note.

    Investor caution is intensifying as the conflict in the Middle East shows signs of escalating further, particularly with oil prices continuing their upward surge. Brent crude has pushed above $80 per barrel, stoking fears that higher energy costs could feed into inflation and complicate the outlook for interest rates.

    The latest spike in crude follows reports that Iran has shut the Strait of Hormuz in retaliation for joint U.S. and Israeli strikes, while warning it would target any vessel attempting to transit the key shipping corridor.

    Steep losses across Asian and European markets are adding to the negative tone and may weigh on U.S. equities at the open. With little major U.S. economic data due, lighter trading volumes could amplify market swings and keep volatility elevated.

    “Investors across the Atlantic are also starting to become more alarmed about the situation in the Middle East,” said Dan Coatsworth, head of markets at AJ Bell. “The suspension of LNG production in Qatar is a particularly sensitive pressure point and has seen gas prices surge globally.”

    He added, “The longer oil and natural gas prices remain elevated, the greater the risk of a meaningful impact on inflation which could mean higher interest rates, an event that’s typically negative for equity markets.”

    On Monday, stocks initially tumbled in response to the unfolding geopolitical crisis but gradually recovered as buyers stepped in. The major indexes rebounded significantly from their intraday lows before ending the session narrowly mixed.

    The Nasdaq, which had dropped as much as 1.6% earlier in the day, closed up 80.65 points, or 0.4%, at 22,748.86. The S&P 500 edged up 2.74 points to 6,881.62, while the Dow Jones Industrial Average slipped 73.14 points, or 0.2%, to 48,904.78.

    The intraday turnaround reflected bargain hunting, with investors taking advantage of the sharp pullback. The Dow notably recovered after touching its lowest level in two months during the session.

    The initial sell-off had followed news that U.S. and Israeli forces carried out coordinated weekend strikes that killed Iranian Supreme Leader Ayatollah Ali Khamenei.

    Iran retaliated with waves of drone and missile strikes targeting several countries across the Middle East, including Kuwait, the United Arab Emirates, Bahrain, Saudi Arabia, Oman and Qatar.

    Hostilities intensified further after Israel conducted airstrikes on Hezbollah positions in Beirut and elsewhere in Lebanon following projectile launches into northern Israel.

    Addressing reporters at the White House, President Donald Trump said the confrontation with Iran could continue for four to five weeks but stressed that the United States has the “capability to go far longer than that.”

    The escalation sent crude prices sharply higher, heightening already persistent concerns about inflation.

    “Scenes in the Middle East have caused widespread nervousness across financial markets,” said Dan Coatsworth, head of markets at AJ Bell. “The U.S. attacks on Iran have caused oil prices to soar amid fears of disruptions to supplies, pushing up costs for businesses and consumers.”

    He added, “If the issues persist then the market will start to worry about new inflationary pressures and that could lower expectations for near-term interest rate cuts.”

    On the economic front, fresh data from the Institute for Supply Management showed U.S. manufacturing growth eased slightly in February. The ISM manufacturing PMI slipped to 52.4 from 52.6 in January, remaining in expansion territory. Economists had expected a reading of 51.8.

    Sector performance was uneven. Networking stocks rallied strongly, lifting the NYSE Arca Networking Index 3.7% to a record closing high.

    Energy producers also outperformed, with the NYSE Arca Oil Index climbing 3.4% as crude prices surged.

    Shares of natural gas companies, software firms and brokerage houses also gained ground. In contrast, airline stocks came under heavy pressure on concerns that escalating tensions could disrupt global travel. The NYSE Arca Airline Index fell 4.1% to its lowest close in two months.

    Housing-related stocks were also notably weaker, with the Philadelphia Housing Sector Index down 2.0%.

  • European Stocks Slide as Rising Middle East Conflict Fuels Market Anxiety: DAX, CAC, FTSE100

    European Stocks Slide as Rising Middle East Conflict Fuels Market Anxiety: DAX, CAC, FTSE100

    European equities tumbled on Tuesday, marking their steepest two-day decline since April, as intensifying tensions in the Middle East drove investors toward safer assets and heightened volatility across financial markets.

    European Central Bank chief economist Philip Lane cautioned that a drawn-out conflict in the region, combined with sustained disruptions to oil and gas supplies, could trigger a “substantial spike” in inflation and a “sharp drop in output” across the euro area, according to an interview with the Financial Times.

    Energy markets reacted sharply. European natural gas prices jumped more than 20% after operations were halted at Qatar’s largest liquefied natural gas export facility, compounding supply concerns.

    The renewed surge in oil and gas prices has revived memories of the 2022 energy crisis sparked by Russia’s invasion of Ukraine — a shock that sent global energy costs soaring and hit Europe especially hard.

    U.S. President Donald Trump indicated that military operations involving Iran could last four to five weeks and added that the United States has the “capability to go far longer than that,” amplifying fears that the conflict could broaden significantly.

    Major European indices were firmly in negative territory. Germany’s DAX fell 3.5%, France’s CAC 40 declined 2.9%, and the U.K.’s FTSE 100 dropped 2.6%.

    On the macroeconomic front, flash data showed eurozone inflation unexpectedly accelerated in February, even before the latest Middle East escalation began. The harmonized index of consumer prices rose 1.9% year-on-year, up from 1.7% in January and compared with expectations for an unchanged 1.7% reading. December had seen a 2.0% increase.

    In the United Kingdom, data from the British Retail Consortium indicated that shop price inflation eased to 1.1% in February from 1.5% the previous month, largely due to declining non-food prices. Economists had anticipated a 1.4% increase.

    Banking stocks extended losses from the prior session. Commerzbank (TG:CBK), Deutsche Bank (TG:DBK), BNP Paribas (EU:BNP), and Barclays (LSE:BARC) all posted sharp declines as investors reassessed risk exposure.

    International Workplace (LSE:IWG) shares also retreated significantly in London, despite the flexible workspace provider reporting largely stable 2025 earnings and a slight rise in revenue.

    Engineering group Smiths Group (LSE:SMIN) fell after announcing a £164 million acquisition of DRC Heat Transfer (DRC), a deal that appeared to weigh on investor sentiment.

    Construction firm Kier Group (LSE:KIE) moved lower as well, even though it delivered solid half-year results.

    French aerospace and technology company Thales (EU:HO) also slipped, despite posting fourth-quarter figures that exceeded market expectations.

  • Futures retreat and oil rallies as Iran tensions unsettle markets – what’s driving trading: Dow Jones, S&P, Nasdaq, Wall Street Futures

    Futures retreat and oil rallies as Iran tensions unsettle markets – what’s driving trading: Dow Jones, S&P, Nasdaq, Wall Street Futures

    U.S. stock futures are pointing sharply lower, despite Wall Street’s rebound on Monday following the outbreak of renewed hostilities involving Iran. President Donald Trump suggested that the joint U.S.-Israeli military effort could extend for weeks, pledging that Washington will do “whatever it takes.” Oil prices are climbing on concerns about potential supply disruptions through the critical Strait of Hormuz, while spot gold has edged lower as the U.S. dollar strengthens. Investors are also awaiting quarterly earnings from Target (NYSE:TGT).

    Futures signal renewed selling pressure

    U.S. equity index futures fell steeply early Tuesday, indicating a weak open after markets steadied in the previous session even as geopolitical tensions persisted.

    At 03:03 ET, Dow futures were down 540 points, or 1.1%. S&P 500 futures had declined 76 points, also 1.1%, while Nasdaq 100 futures dropped 347 points, or 1.4%.

    On Monday, the S&P 500 and the tech-focused Nasdaq Composite both closed higher, bouncing back from sharp early losses sparked by weekend strikes on Iran carried out by the U.S. and Israel that reportedly killed Iran’s long-serving leader Ayatollah Ali Khamenei. The Dow Jones Industrial Average ended just 0.2% lower, trimming most of its initial slide.

    “[S]tocks saw pressure out of the gate, but the major indices staged an impressive rebound from their lows as U.S. equity investors stayed calm about events unfolding in the Middle East,” analysts at Vital Knowledge wrote in a note to clients.

    They added that although Trump warned the military campaign could last four to five weeks and Iran responded with airstrikes across the region, the “consensus view is that this conflict won’t metastasize into an uncontrolled quagmire.”

    Beyond the Middle East developments, investors were also weighing a rebound in previously out-of-favor technology shares and fresh data showing a spike in input costs for U.S. manufacturers.

    Iran conflict remains central focus

    The outlook for the conflict remains uncertain, with Trump acknowledging that the timeline could extend beyond earlier projections.

    At his first public appearance since the launch of the attacks, Trump said “we’re already substantially ahead of our time projections,” but stressed that “whatever the time is, it’s okay.”

    “Whatever it takes,” Trump said, later adding on social media that the United States has a “virtually unlimited” supply of certain types of weaponry.

    Reuters reported that the joint U.S.-Israeli offensive has led to the sinking of at least 10 Iranian naval vessels and struck more than 1,000 targets. Israel’s military said it is continuing operations in Iran and neighboring Lebanon, and that its forces have advanced into new areas of southern Lebanon.

    According to media reports, Tehran escalated its retaliation early Tuesday, striking sites in the Gulf region, including the U.S. embassy in Saudi Arabia and Dubai International Airport, a key global travel hub. Airline and hotel stocks were among the worst performers on Monday, reflecting fears of widespread travel disruptions.

    Amazon’s cloud computing arm disclosed that two of its facilities in the UAE and Bahrain were hit by drone attacks and were “significantly impaired.”

    Oil prices extend sharp gains

    Crude prices continued to rally Tuesday, adding to substantial gains from the prior session as threats to shipping flows through the Strait of Hormuz intensified supply concerns.

    Brent crude futures jumped 4.3% to $81.10 per barrel, while U.S. West Texas Intermediate crude rose 4% to $74.05 per barrel.

    Both benchmarks had already settled more than 7% higher on Monday after surging as much as 13% to their highest levels in a year.

    Tensions escalated after Iranian officials vowed to target any vessel attempting to pass through the Strait of Hormuz, a strategic chokepoint through which roughly one-fifth of global oil supply transits.

    “While a full, long-term closure of the Strait remains an extreme scenario, even partial disruption to tanker traffic tightens market balances and could push crude prices materially higher if sustained. Continued military escalation and elevated risk premia in energy markets are likely to dominate price action until there is clearer evidence of de-escalation or alternative supply routes emerge,” Laurence Booth, Global Head of Markets at CMC Markets, told Investing.com.

    Some analysts noted that potential output increases from OPEC+ could partially offset any significant supply interruptions.

    Energy-related fears weighed heavily on Asian markets Tuesday, with stocks in South Korea, Japan and Taiwan posting declines. European equities also moved lower.

    Gold slips as dollar firms

    Spot gold eased after early gains, pressured by a strengthening U.S. dollar even as investors monitored escalating geopolitical risks and oil market volatility.

    Spot gold was last down 0.3% at $5,309.17 per ounce, after climbing as much as 1% earlier in the session to $5,379.65 per ounce. U.S. gold futures edged up 0.2% to $5,320.24 per ounce. The metal had advanced 1% in the previous session.

    Gold is typically viewed as a safe-haven asset during periods of geopolitical stress, but it often comes under pressure when the dollar appreciates.

    Target earnings in spotlight

    Target is set to release its latest quarterly results, offering further insight into U.S. consumer spending trends amid persistent cost-of-living pressures.

    Although Trump has described the U.S. economy as “roaring,” recent polling suggests many Americans remain unconvinced. A Reuters/Ipsos survey last month found that 68% of respondents — including members of Trump’s Republican Party — disagreed with that assessment.

    U.S. economic growth slowed more than expected in the fourth quarter, though many analysts attributed the weakness to a temporary government shutdown, noting that underlying consumer and business spending remained solid. Some economists project modest economic expansion in 2026, supported in part by tax cuts included in Trump’s signature budget legislation enacted last year.

    Against this backdrop, Target has struggled to attract budget-conscious shoppers, in contrast to competitors such as Walmart. The retailer’s profit has fallen 14% over the past five years.

    Large shareholders, including public pension funds in New York and California, have since begun openly questioning the company’s strategic decisions and leadership approach.

  • European equities slide as Middle East tensions escalate: DAX, CAC, FTSE100

    European equities slide as Middle East tensions escalate: DAX, CAC, FTSE100

    European stock markets fell sharply on Tuesday, pressured by mounting concerns over the expanding conflict in the Middle East and its impact on global risk appetite.

    By 08:05 GMT, Germany’s DAX had dropped 1.9%, France’s CAC 40 was down 1.2%, and the UK’s FTSE 100 declined 1%.

    Escalation in the Gulf

    Investor sentiment has deteriorated as hostilities between the U.S. and Iran, which erupted over the weekend, show signs of spreading across the wider Gulf region.

    Reports suggested that the U.S. embassy in Riyadh was targeted by missile fire, while Amazon data centres in the UAE and Bahrain were also struck, as Iran launched retaliatory attacks across multiple Middle Eastern countries.

    The developments have cast fresh doubt on the long-held perception of Gulf hubs such as Dubai as safe havens.

    At the same time, Israel said it was conducting operations against both Iran and Lebanon, after the Tehran-backed Hezbollah group launched missiles and drones toward Tel Aviv.

    The U.S. State Department announced on Tuesday that non-essential U.S. government staff and family members had been ordered to leave Bahrain, Iraq and Jordan.

    U.S. President Donald Trump said overnight that Washington would do “whatever it takes” to accomplish its military objectives, indicating that operations could continue for several weeks.

    Earnings remain in focus

    Despite geopolitical tensions dominating headlines, investors are also assessing a fresh batch of corporate results.

    Thales (EU:HO) delivered fourth-quarter figures ahead of expectations, supported by robust performance in its Aerospace and Defence divisions, though its Cyber & Digital segment remained subdued.

    Swiss packaging firm SIG Group reported a loss for 2025 after booking €350.7 million in one-off charges related to a strategic review, while revenue remained broadly flat in a weak market environment.

    Kuehne & Nagel (TG:KNIA) posted a 24.8% decline in annual profit for 2025, citing currency headwinds and margin pressure. The Swiss logistics group’s equity ratio fell to 18.5%, compared with 27.8% the previous year.

    Lottomatica (BIT:LTMC) exceeded expectations for 2025, reporting 21% profit growth as the Italian gaming operator expanded its online market share.

    Inflation data awaited

    Markets are also looking ahead to the release of Eurozone flash inflation data for February later in the session, particularly given the renewed rise in energy prices.

    Annual headline inflation is forecast at 1.7%, unchanged from January, while core inflation — which excludes food and energy — is expected at 2.2% year-on-year.

    Oil prices extend rally

    Crude prices surged further on Tuesday, building on the previous session’s sharp gains, as concerns over potential disruptions to shipments through the Strait of Hormuz intensified.

    Brent futures jumped 4.3% to $81.10 per barrel, while U.S. West Texas Intermediate crude advanced 4% to $74.05 per barrel.

    Both benchmarks had already closed more than 7% higher on Monday after spiking as much as 13% to one-year highs.

    Tensions escalated after Iranian officials threatened to target any vessel attempting to transit the Strait of Hormuz, raising fears of significant disruptions to oil exports from major Gulf producers.

  • FTSE 100 Slides as Geopolitical Tensions Weigh; Pound Falls Ahead of UK Budget

    FTSE 100 Slides as Geopolitical Tensions Weigh; Pound Falls Ahead of UK Budget

    The FTSE 100 extended its recent decline, tracking broader European weakness as escalating tensions in the Middle East dampened investor sentiment. Market participants were also digesting a fresh wave of UK corporate earnings while keeping a close eye on the upcoming UK Spring Budget.

    By 0821 GMT, the blue-chip index was down 1.4%. Sterling weakened 0.7% against the U.S. dollar to 1.3322. On the continent, Germany’s DAX fell 2.3% and France’s CAC 40 dropped 1.6%.

    Overnight, U.S. President Donald Trump said Washington would do “whatever it takes” to achieve its military objectives, signalling that operations could extend for several weeks. Analysts at Jefferies suggested that identifying a clear exit strategy may prove challenging, noting that any leadership change in Iran without broader structural shifts would likely be insufficient for U.S. or Israeli objectives. They added that further escalation could occur before diplomatic progress is achieved.

    UK Corporate Round-Up

    Greggs plc (LSE:GRG) reported full-year profit before tax of £171.9 million for the 52 weeks to 27 December 2025, down 9.4% year-on-year but broadly in line with analyst expectations. Total sales rose 6.8% to £2.15 billion, supported by new store openings, while like-for-like sales growth slowed to 2.4% amid tougher trading conditions and an unusually warm summer.

    Inchcape Plc (LSE:INCH) posted 2025 pretax profit of £443 million, matching consensus forecasts, and announced a £175 million share buyback — its second in under a year. Earnings per share rose 13% on a constant currency basis to 80.8 pence, ahead of expectations, while the dividend increased 13% to 32.3 pence.

    Aberdeen Group plc (LSE:ABDN) reported adjusted operating profit up 4% to £264 million, with IFRS profit before tax jumping 76% to £442 million. Assets under management and administration rose 9% to £556 billion, and operating profit at its interactive investor platform climbed 34%. The company deferred its £1 billion net inflow target to 2027.

    Fresnillo plc (LSE:FRES) delivered strong 2025 results, with adjusted revenue up 27.6% to $4.65 billion and EBITDA surging 80.7% to $2.80 billion, benefiting from higher precious metal prices and improved cost discipline.

    Keller Group plc (LSE:KLR) reported revenue of £3.09 billion and adjusted operating profit of £218.2 million, alongside a new £100 million share buyback programme.

    International Workplace Group Plc (LSE:IWG) posted adjusted EBITDA of $531 million for 2025, up 6%, and lifted its 2026 buyback programme to $100 million.

    Morgan Advanced Materials plc (LSE:MGAM) reported 2025 sales of £1,030 million, ahead of consensus, though organic growth declined 3.3%. Management said 2026 guidance aligns with market expectations.

    Johnson Service Group plc (LSE:JSG) announced full-year adjusted EBITA of £72.5 million, broadly matching analyst forecasts.

    With geopolitical uncertainty persisting and fiscal policy under scrutiny, markets remain sensitive to both global developments and domestic economic signals.

  • Wall Street poised for losses as U.S.-Iran tensions shake investor confidence: Dow Jones, S&P, Nasdaq, Futures

    Wall Street poised for losses as U.S.-Iran tensions shake investor confidence: Dow Jones, S&P, Nasdaq, Futures

    U.S. equity futures signaled a sharply weaker start to trading on Monday, pointing to further declines after stocks posted losses in each of the previous two sessions.

    Market sentiment deteriorated following coordinated military strikes by the United States and Israel on Iran over the weekend that resulted in the death of Iranian Supreme Leader Ayatollah Ali Khamenei.

    Regional tensions intensified further after Israel launched additional air attacks on Hezbollah positions in Beirut and other parts of Lebanon in response to projectiles fired into northern Israel from Lebanese territory.

    President Donald Trump indicated that hostilities with Iran could continue for as long as four weeks, fueling concerns that the conflict may expand across the broader Middle East.

    The escalation has pushed crude oil prices sharply higher, reviving fears that inflationary pressures could strengthen again.

    “Scenes in the Middle East have caused widespread nervousness across financial markets,” said Dan Coatsworth, head of markets at AJ Bell. “The U.S. attacks on Iran have caused oil prices to soar amid fears of disruptions to supplies, pushing up costs for businesses and consumers.”

    He added, “If the issues persist then the market will start to worry about new inflationary pressures and that could lower expectations for near-term interest rate cuts.”

    Stocks had already declined notably on Friday, extending Thursday’s sell-off, with technology shares leading losses and the Nasdaq continuing to underperform.

    Despite recovering somewhat from session lows, the major indices still closed firmly lower. The Dow Jones Industrial Average dropped 521.28 points, or 1.1%, to 48,977.92, the Nasdaq Composite fell 210.17 points, or 0.9%, to 22,688.21, and the S&P 500 slipped 29.98 points, or 0.4%, to 6,878.88.

    For the week, the Dow lost 1.3%, the Nasdaq declined 1.0%, and the S&P 500 edged down 0.4%.

    Additional pressure came from fresh economic data showing U.S. producer prices rose more than anticipated in January. The Labor Department reported that its producer price index for final demand increased by 0.5% following a downwardly revised 0.4% gain in December.

    Economists had forecast a 0.3% increase compared with the earlier estimate of a 0.5% rise for the prior month.

    On a yearly basis, producer price growth slowed slightly to 2.9% in January from 3.0% in December, while economists had expected a decline to 2.8%.

    “For the past month the market has been worried about AI disruption and its impact on the labor market, so inflation hasn’t been top of mind,” said Chris Zaccarelli, Chief Investment Officer for Northlight Asset Management.

    He continued, “But this morning’s inflation readings could give the Fed another reason to be more patient with rate cuts and wait until the second half of the year before making any changes.”

    The stronger-than-expected inflation data, combined with concerns over AI-related job losses, has raised fears that the economy could face stagflationary conditions.

    Adding to worries about technological disruption, Block (XYZ) announced plans to cut nearly half of its workforce.

    Block Chief Financial Officer Amrita Ahuja said the company sees an “opportunity to move faster with smaller, highly talented teams using AI to automate more work.”

    Airline stocks were among the worst performers, sending the NYSE Arca Airline Index down 5.0% to its lowest closing level in nearly a month.

    Financial stocks also came under heavy pressure, with the KBW Bank Index and the NYSE Arca Broker/Dealer Index falling 4.9% and 3.0%, respectively.

    Software and semiconductor shares also declined noticeably, while pharmaceutical, retail and telecommunications stocks posted gains during the session.

  • European stocks slide as Middle East tensions weigh on markets: DAX, CAC, FTSE100

    European stocks slide as Middle East tensions weigh on markets: DAX, CAC, FTSE100

    European equities moved sharply lower on Monday as escalating conflict in the Middle East weakened investor sentiment and prompted a shift away from risk-sensitive assets.

    Concerns about inflation resurfaced after Brent crude prices surged nearly 10%, reaching their highest levels since January 2025 amid fears that regional instability could disrupt global oil supplies.

    Market participants are closely monitoring developments around the Strait of Hormuz, a vital shipping route responsible for a significant share of worldwide oil transportation.

    On the economic front, fresh data showed German retail sales declined more than anticipated in January, while UK house prices rose slightly faster than expected in February following a late-2025 slowdown.

    Major European indices posted broad declines, with Germany’s DAX falling 2.6%, France’s CAC 40 dropping 2.2%, and the UK’s FTSE 100 retreating 1.5%.

    Banking stocks were among the worst performers, as Commerzbank (TG:CBK), Deutsche Bank (TG:DBK), BNP Paribas (EU:BNP) and Barclays (LSE:BARC) all recorded notable losses amid renewed concerns about transparency in private lending markets.

    UK engineering group Senior (LSE:SNR) also traded lower after reporting 2025 revenue that fell short of market expectations.

    Medical technology company Smith & Nephew (LSE:SN.) declined sharply despite announcing improved profit and cash flow figures for 2025.

    In contrast, Bunzl (LSE:BNZL) gained ground after the distribution group reported 3.0% revenue growth at constant exchange rates for 2025, supported by acquisitions.

    Shares in Sage Group (LSE:SGE) edged higher after the software firm announced plans to launch a share buyback programme worth up to £300 million.

  • Luxury stocks decline as Iran conflict clouds Middle East consumer outlook

    Luxury stocks decline as Iran conflict clouds Middle East consumer outlook

    Shares of luxury goods companies moved lower on Monday after Morgan Stanley analysts warned that escalating conflict involving Iran could weigh on consumer spending sentiment across the Middle East.

    In Paris, shares of Louis Vuitton owner LVMH (EU:MC) fell more than 3%, while Gucci parent Kering (EU:KER) dropped 4.3%. Switzerland-listed Richemont (TG:RITN) declined over 6%, and UK luxury brand Burberry (LSE:BRBY) lost around 4%. Sports car maker Ferrari (BIT:RACE) also slipped 3.8% in U.S. premarket trading.

    In a research note, Morgan Stanley analysts estimated that the Middle East accounts for roughly 5% of total sales for most luxury companies, with the United Arab Emirates representing the largest individual market within the region.

    They added that spending in the Middle East typically accelerates toward the latter part of the Ramadan holy month, particularly in the run-up to Eid al-Fitr, which this year falls on March 19 and 20. However, the recent outbreak of violence could dampen luxury purchases during this key seasonal period — often referred to as the “Ramadan rush” — according to analysts including Natasha Bonnet and Edouard Aubin.

    On Saturday, the United States and Israel announced coordinated strikes targeting multiple locations in Iran, resulting in the deaths of several senior Iranian officials, including Supreme Leader Ayatollah Ali Khamenei. U.S. President Donald Trump called on Iranian opposition groups to overthrow the country’s long-standing political system, although many senior U.S. officials remain doubtful that regime change is imminent, Reuters reported.

    Questions also remain over how long Washington intends to remain involved in the conflict. Trump told the New York Times that military operations could continue for “four to five weeks.” He also declined to outline how a political transition in Iran might unfold, saying he has “three very good choices” but “won’t be revealing them now,” according to the New York Times.

    The strikes prompted retaliatory actions by Tehran targeting locations across the Middle East, including several energy-producing Gulf nations.

  • BAE Systems shares rally as Middle East tensions lift defence sector outlook

    BAE Systems shares rally as Middle East tensions lift defence sector outlook

    Shares in BAE Systems PLC (LSE:BAE) climbed 5.5% on Monday following heightened tensions in the Middle East over the weekend, with JPMorgan analysts identifying the UK defence contractor as one of the companies best positioned to benefit from a potential increase in U.S. defence spending.

    In a research note, JPMorgan said the European defence sector could see further gains amid ongoing geopolitical conflicts and expectations of higher military budgets in the United States.

    The bank highlighted comments from President Trump in January 2026 indicating plans to raise the U.S. defence budget by as much as 50% in fiscal 2027, although JPMorgan considers a rise of around 20–30% to be a more realistic scenario.

    Analysts said the accelerating pace of U.S. military operations during 2026 is increasing pressure on policymakers to boost defence expenditure. BAE Systems derives roughly 44% of its revenue from the U.S. defence market — the highest exposure among European defence companies covered by JPMorgan.

    JPMorgan also pointed to the need for the United States to replenish missile inventories following recent military activity. Media reports from June 2025 suggested the U.S. deployed between 15% and 25% of its total THAAD interceptor stockpile during a 12-day conflict, using approximately 100 to 150 interceptors from an estimated inventory of around 650 units.

    BAE Systems supplies the infrared seeker component used in the THAAD missile guidance system, with JPMorgan estimating the company generates about $1 million in revenue per THAAD unit.

    Other UK-listed defence companies also traded higher on Monday. Babcock International Group PLC (LSE:BAB) rose 0.9%, while Qinetiq Group PLC (LSE:QQ.) gained roughly 3% as of 11:00 GMT.

    JPMorgan additionally highlighted several European defence firms with meaningful exposure to the U.S. market, including RENK Group AG (TG:R3NK) with around 25% exposure, Leonardo SpA (BIT:LDO) at approximately 23%, and Qinetiq Group PLC at about 18%.