European Markets Slip as Middle East Tensions Lift Oil Prices 

 European equities opened lower on Friday as escalating conflict in the Middle East pushed energy prices higher and renewed concerns that inflation could remain elevated. The pan-European STOXX Europe 600 declined around 0.6% in early trading, although it remained on course for a modest weekly gain thanks to a strong start to the corporate earnings season. Ongoing military exchanges between the United States and Iran have heightened fears of further disruption to global energy supplies, while higher oil prices have reinforced expectations that central banks may need to keep monetary policy restrictive for longer. Technology stocks led the decline, with semiconductor companies coming under pressure, while European markets continued to outperform many Asian peers due to their lower exposure to large-cap technology shares. 

 Despite the cautious tone, investor sentiment has been supported by resilient corporate earnings, particularly from major European banks, and improving expectations for regional equities. Strategists at leading investment banks have recently raised their year-end targets for the STOXX Europe 600, citing stronger earnings growth and the market’s ability to withstand geopolitical uncertainty. Investors are now looking ahead to next week’s European Central Bank policy meeting, where rates are widely expected to remain unchanged, although markets have increased the probability of a rate hike later this year. Among major indices, London’s FTSE 100, France’s CAC 40, Germany’s DAX, Italy’s FTSE MIB, and Spain’s IBEX 35 all traded lower as investors balanced earnings optimism against mounting geopolitical risks.