European stock markets are expected to open with mixed performance on Thursday as investors closely monitor escalating geopolitical tensions in the Middle East, specifically the ongoing conflict involving the U.S. and Israel against Iran [1]. According to IG data, the U.K.'s FTSE index is projected to open 0.5% higher, while Germany's DAX is seen down 0.2%, France's CAC 40 down 0.25%, Italy's FTSE MIB 0.2% lower, and Spain's IBEX 0.5% lower [1].
The situation in Spain is particularly notable, as U.S. President Donald Trump announced plans to cut off all trade with Spain following the country's refusal to allow U.S. forces to use its bases for strikes on Iran. Trump stated, "Spain has been terrible. We're going to cut off all trade with Spain. We don't want anything to do with Spain" [1].
The conflict has intensified, with Israel launching a new round of attacks on Tehran on Wednesday. Israel's defense minister has vowed to "crush" the Iranian regime's capabilities, while the U.S. reported destroying 17 Iranian ships and nearly 2,000 targets [1]. In Iran, senior clerics are reportedly considering Mojtaba Khamenei, son of the late Ayatollah Ali Khamenei, for the position of supreme leader [1].
The ultimate objectives of "Operation Epic Fury" remain unclear, and experts interviewed by CNBC warn that the U.S. and Israel could become entangled in a prolonged conflict if Iran proves more resilient than anticipated [1]. In addition to geopolitical developments, earnings reports from Merck, DHL Group, Reckitt Benckiser, Galderma Group, and Universal Music Group are expected, along with the latest EU retail sales data [1].
CONCLUSION
Escalating conflict between the U.S., Israel, and Iran is causing significant uncertainty and volatility in European markets, with mixed opening projections across major indices. The situation is further complicated by U.S.-Spain tensions and the potential for a prolonged war, leading to heightened risk and negative sentiment among investors.