Middle East Flare-up Seen Dragging Down European Stocks

Efforts to restore shipping traffic through the Strait of Hormuz and the resultant escalation in tensions in the Middle East are expected to weigh on stock markets in Europe on Tuesday. A muted opening is expected while markets assess the threats to the four-week ceasefire between the US and Iran. Corporate earnings updates are also expected to sway market sentiment.

Wall Street had closed on a negative note on Monday amidst an escalation in tensions in the Middle East. The Dow Jones Industrial Average slipped 1.1 percent to finish trading at 48,941.90. The S&P 500 also declined 0.41 percent to finish trading at 7,200.75. The tech-heavy Nasdaq Composite also shed 0.19 percent to close trading at 25,067.80.