European stock markets closed nearly unchanged on Wednesday (June 10), after fluctuating throughout the day as investors assessed the renewed tensions between the US and Iran and awaited the outcome of the European Central Bank (ECB) monetary policy meeting.
The STOXX 600 index closed at 618.17 points, down 0.47 points or -0.08%.
France's CAC-40 index closed at 8,161.83 points, down 41.60 points or -0.51%; Germany's DAX index closed at 24,195.31 points, down 237.75 points or -0.97%; and London's FTSE 100 index closed at 10,254.81 points, up 27.48 points or +0.27%.
Oil prices rose and moved near $93 per barrel after one of the largest clashes between the US and Iran since the two countries agreed to a ceasefire in April.
US President Donald Trump said Iran has taken too long to negotiate a deal and must now face the consequences, while Iran said it would reconsider its diplomatic engagement with the US.
Analysts at Lombard Odier said what happened today appears to be sporadic retaliatory strikes rather than an escalation or rekindling of a broader conflict.
Analysts added that both the US and Iran have clear reasons to want a deal, as a resolution would benefit Trump politically, while Iran faces pressure from large amounts of oil still stranded near the Strait of Hormuz due to the US blockade.
The STOXX 600 fell for a fourth consecutive day, with sentiment also affected by the deteriorating economic outlook for Germany, Europe's largest economy. The DIW economic research institute said Germany is likely to enter a technical recession this year, hit by energy prices linked to the Iran war, derailing a fragile recovery, and halving its 2026 growth forecast. This caused Germany's main stock index to fall about 1%.
Market attention is now focused on the ECB, which began its two-day monetary policy meeting on Wednesday. Markets broadly expect the central bank to raise interest rates by 0.25% to control inflationary effects from higher energy costs, while investors will watch for signals on the rate outlook beyond this week.
Meanwhile, US consumer price inflation in May rose at the fastest pace in three years, though the figure was in line with market expectations, supporting the view that the Federal Reserve may keep rates unchanged until 2027.
Mining and industrial stocks led the decline, both falling over 1%.
Technology stocks fell 0.7%, extending the decline since Friday to 3% and paring nearly 30% gains over the past two months.
Sharp volatility in artificial intelligence (AI) stocks has caused turbulence in US and Asian markets this week.
However, the impact on the STOXX 600 was limited as the index has a relatively low technology weighting.
Norway's Kongsberg shares swung sharply, falling 5% after earlier rising as much as 3.3% during the day, as the defense and technology company's profit margin forecast disappointed investors.
