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Markets Retreat
European stocks slipped as investor optimism from a brief rally faded.
“European stocks slipped modestly as investor optimism from a brief rally faded amid lingering concerns about the conflict’s durability, oil price volatility, and inflation risk”
The STOXX 600 was down 0.2%, Germany's DAX fell 1.1%, and France's CAC 40 dropped 0.2%.
The energy sector gained almost 2% as oil prices rose on the day.
Tech and luxury stocks were under pressure, with SAP dropping 6.8% and LVMH sliding 3%.
Traders still expect two quarter-point ECB tightening moves before year-end.
FTSE 100 Cautious
FTSE 100 futures pointed to a modestly firmer open, rising around 0.4%.
The guarded advance followed a strong 3.7% climb in the STOXX Europe 600 the previous day.
President Trump said US forces would remain until a real agreement with Iran is fully complied with.
Investors were treating the advance as a relief rally rather than a full return to confidence.
Travel, industrial, and banking stocks led the move.
Oil and Inflation
Oil prices rebounded with Brent crude trading around $97 per barrel.
“Brent crude has clawed back some ground, trading around $97 a barrel”
Brent crude was still roughly 40% higher than pre-conflict levels.
Economists expect the surge in energy prices to show up globally within inflation figures.
The Bank of England has held its key interest rate at 3.75 percent.
Markets expect the BoE to hold rates again at its next meeting on April 30.
Sector Divergence
Cyclical and growth sectors felt the heat with industrials down 1%.
Luxury stocks plunged 2.3%.
Travel, banks, and tech all slipped into the red.
Energy was the lone bright spot, gaining 0.9%.
Tui shed nearly 4% after a 13% recovery in the previous session.