European stock markets closed lower on Tuesday, weighed down by diminishing prospects for a swift resolution to the US-Iran conflict and the precarious position of UK Prime Minister Keir Starmer.
The pan-European Stoxx 600 index fell nearly 1.1%, with most sectors and major bourses deep in negative territory.
| Index | Latest Level | Change | % Change | | :--- | :--- | :--- | :--- | | French CAC 40 | 7,979.92 | -76.46 | -0.95% | | Italian FTSE MIB | 48,990.98 | -673.97 | -1.36% | | UK FTSE 100 | 10,265.32 | -4.11 | -0.04% | | German DAX | 23,974.67 | -375.61 | -1.54% | | Spanish IBEX 35 | 17,573.60 | -278.90 | -1.56% | | Stoxx Europe 600 | 606.34 | -6.45 | -1.05% |
The UK political crisis intensified. Following the Labour Party's heavy losses in last week's local council elections, cabinet ministers have joined over 70 Labour MPs in calling for Starmer to resign or set a clear departure timetable. However, at Tuesday's weekly cabinet meeting, Starmer stated he would not resign, vowed to "continue to fulfill his governing duties," and reminded colleagues that the party's formal leadership challenge process had not been initiated. Starmer has taken responsibility for the election defeat and acknowledged "questions" within the party on Monday, pledging to "confront the major challenges facing the country." His remarks failed to quell internal discontent, with several prime ministerial aides resigning on Monday. UK government bond (Gilt) yields continued to climb on Tuesday. The benchmark 10-year Gilt yield rose approximately 10 basis points to 5.10%. Meanwhile, the British pound fell 0.7% against the US dollar and 0.3% against the euro. Additionally, market optimism for a US-Iran peace deal was dealt a blow. President Trump stated late Monday that Iran's response to the US ceasefire proposal was "unacceptable" and the current truce was "hanging by a thread." Speaking to reporters in the Oval Office, Trump described the month-old ceasefire as "fragile." Consequently, oil prices rose, and Asian-Pacific markets were mixed overnight. US stock markets also edged lower as investors focused on April's Consumer Price Index (CPI) data. The S&P 500 fell 0.8%, and the Dow Jones Industrial Average declined 0.4%.
**Corporate Earnings Updates** Several companies reported earnings on Tuesday, including Siemens Energy, Munich Re, and Imperial Brands.
**Bayer**: The German biotech giant reported first-quarter earnings. Operating profit, adjusted for special items, rose 9% year-over-year to €4.5 billion (approximately $5.3 billion), exceeding market expectations. The company also maintained its full-year guidance. Its share price closed up over 4%. *Note: Bayer appealed to the US Supreme Court last month regarding lawsuits related to its Roundup herbicide. In 2018, Bayer acquired Roundup manufacturer Monsanto for $63 billion and has since faced numerous lawsuits alleging that Roundup's glyphosate ingredient causes cancer. Bayer expects the Supreme Court to rule in June, stating in its earnings report that the litigation remains a "legal risk." In early 2026, Monsanto reached a settlement agreement to pay up to $7.25 billion over 21 years for a nationwide class action settlement. Plaintiffs can opt out of the settlement by June 4; Monsanto reserves the right to terminate the agreement if "too many" plaintiffs opt out.*
**Vodafone**: The London-listed telecom giant released its full-year results Tuesday morning. Revenue grew 8% year-over-year to €40.5 billion, slightly below the London Stock Exchange Group (LSEG) consensus estimate. Growth was primarily driven by strong service revenue and the consolidation of UK mobile operator Three. The company swung from a loss of €40 million the previous year to a profit of €2.8 billion, surpassing analysts' expectations of €2.1 billion. Its share price closed down 7.7%.
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