The European stock exchanges closed Wednesday with little conviction, while Wall Street was in disarray at mid-session as investors tried to balance geopolitics and numerous corporate results.
In Paris, the CAC 40 ended with a loss of 0.64% at 8,274.57 points, weighed down by the dominant luxury sector. The British Footsie fell by 0.47%, while the German DAX rose by 0.18%.
The EuroStoxx 50 index lost 0.74%, the FTSEurofirst 300 0.51%, and the Stoxx 600 0.43%.
At the close in Europe, the Dow Jones was down 0.48%, but the S&P 500 was up by 0.43% and the Nasdaq gained 1.10%. Bank of America (+1.75%) and Morgan Stanley (+4.35%) results were well-received, with both the S&P 500 and the Nasdaq erasing all losses incurred since the start of the war in Iran.
In Europe, stocks showed small fluctuations during most of the session, with some indices briefly turning positive before ending mostly in the red.
Caution prevailed amidst uncertainty, with President Donald Trump suggesting the conflict could end soon and the Strait of Hormuz reopening shortly. However, Iranian Revolutionary Guards warned they would block imports and exports in the Persian Gulf and the Sea of Oman if the U.S. maintained its blockade on Iranian ships. Additionally, Axios reported that Washington and Tehran were close to a framework agreement to end the war, citing two U.S. officials.
“The market shows cautious optimism thinking that we can achieve peace with Iran,” summarized Art Hogan, chief market strategist at B. Riley Wealth.
Indicators pointed to some investor confidence, with Wall Street’s volatility index decreasing gradually towards the close, around 18 points, in Europe, while the dollar depreciated and gold, a safe-haven asset, declined.
Aside from geopolitical developments, investors focused on company earnings, particularly in the luxury sector in Europe and the financial sector in the U.S., which continued to perform well.
In Europe: – Hermès dropped by 8.21% after reporting lower-than-expected sales for the first quarter, impacted by the war in Iran affecting spending in the Middle East and France. – Kering plunged by 9.28% as Gucci sales saw another year-on-year decline in the first quarter. – Stellantis gained nearly 2% thanks to a 12% increase in deliveries in the first quarter. – ASML fell by 4.25% after revising its revenue forecast for the year, while Aixtron surged by 20.23% with its annual outlook.
Thursday’s market outlook: (Claude Chendjou reporting, edited by Sophie Louet)
