EUROPEAN EQUITIES UPDATE: Stocks hit on geopolitical tensions and trade concerns

STOXX 600: -1.0%. DAX 40: -1.3%. FTSE 100: U/C. CAC 40 -0.8%. FTSE MIB -1.1%. IBEX 35 -0.7%. SMI -0.8%.

• European bourses are very much on the backfoot in a catch-up play to some of the losses seen late in the US session. The main two risk factors come in the form of 1) geopolitical risks - the US evacuated non-emergency US government personnel from several Middle Eastern countries due to heightened regional tensions. Additionally, CBS reported US officials were told that Israel is fully ready for an Iran operation. 2) Trade concerns - US President Trump is planning to send letters in a week and a half to countries to take it or leave it regarding a trade deal. He also remarked that the US will set unilateral tariff rates within two weeks. This aside, fresh macro drivers for the Eurozone are on the light side.

Sectors: Mostly Negative

• Sectors are mostly in the red with the exception of energy names given yesterday's rally in crude, which has supported the likes of BP (+1.7%), Shell (+1%). To the downside, the gains in energy prices are hampering the airline sector: IAG (-3%), easyJet (-2.6%).


• Autos are another laggard and acting as a drag on the DAX (the regional underperforming) with angst being caused by fears that the EU could be in the sights of the US government if it looks to impose unilateral tariffs in two weeks. Other lagging sectors include Basic Resources and Insurance names. The former is tracking the downside in base metals prices, whilst the latter has been subject to several broker downgrades at Barclays; Allianz (-1.9%), Swiss Re (-2.5%).


• On an individual basis, Tesco (+2.2%) shares are a notable outperformer following a beat on LFL sales in its Q1 trading update, which also reported an increase in market share.

US Equity Futures: ES -0.6%, NQ -0.6%, DJIA -0.5%, RTY -1%

• As mentioned above, the risk sentiment has deteriorated on account of geopolitical tensions in the Middle East and concerns over upcoming potential unilateral trade tariffs by the US. On today's docket, US PPI data for May is due, and with yesterday's CPI, will enable econometricians to begin modelling how the PCE data (the Fed's preferred gauge, due on June 27th) will look; additionally, weekly US jobless claims are due. In Europe, there will be some ECB speak. After hours, Adobe (ADBE) is due to report. Oracle shares are up nearly 8% in pre-market trade after it forecast solid cloud infrastructure revenue growth for the next fiscal year, with orders seen more than doubling.

12 Jun 2025 - 10:00- ForexGeopolitical- Source: Newsquawk