Middle East Conflict Drives European Market Volatility

European stock markets remained volatile between July 15 and July 16, 2026, as escalating military tensions between the United States and Iran overshadowed corporate performance. The pan-European STOXX 600 and major indices in Germany, France, and the U.K. saw consistent declines starting Wednesday, driven by investor fears of an all-out regional war. This instability intensified after the United States launched attacks across Iran on Wednesday night, prompting Iran to retaliate by striking U.S. military bases in neighboring Gulf States. The Iranian government warned it would target further key regional assets if its infrastructure remained under attack.

Geopolitical risks impacted the energy sector, with TotalEnergies reporting a second-quarter output loss of approximately 210,000 barrels of oil equivalent per day. Brent crude prices held near $85 per barrel. Some market pressure was mitigated by the U.K. Office for National Statistics reporting a 0.1% increase in May GDP, primarily driven by the service sector.

Corporate activity provided sporadic gains amid the downturn. Uber Technologies launched a public takeover bid for Delivery Hero at €41.50 per share following advanced negotiations. Other major developments included a $5.5 billion acquisition of Rotork by ABB, a sales forecast increase from ASML Holding due to AI spending, and strong results from Richemont and Publicis Groupe. Conversely, Ocado shares slumped 16% following fulfillment center delays.