European stock markets fell as military strikes in the Middle East continued and U.S. President Donald Trump increased pressure on Iran ahead of a critical deadline. The Stoxx Europe 600 Index closed down 1% in London, after having risen as much as 0.8% earlier in the session. Media stocks were the top performers, with Universal Music Group surging 11% after Pershing Square made a bid to acquire the entertainment company. Technology stocks led the declines, with ASML Holding dropping 4.1% after U.S. lawmakers proposed tightening restrictions on exports of chip-making equipment to China.
On Tuesday, Trump posted on social media threatening severe consequences for Iran and referred to the 8 p.m. Eastern Time deadline for an agreement as one of the "most important moments in global history." Reports indicated that Iran has currently halted negotiations.
"The market simply cannot see beyond Trump's next social media post, making it extremely difficult for investors," said Joachim Klement, head of strategy at Panmure Liberum. He added that if a deal is not reached, European stocks could experience a "final wave of panic selling, which has not yet occurred during this correction."
Comments