European stocks close lower as Iran war continues to dominate sentiment

2026-03-07 06:18:27

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U.S. President Donald Trump speaks during a roundtable meeting on the administration’s “ratepayer protection pledge” in the Indian Treaty Room at the White House on March 4, 2026 in Washington, DC.

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LONDON — European stocks closed lower Thursday as market participants followed geopolitical developments in the Middle East.

The pan-European Stoxx 600 ended 1.4% lower, erasing gains made earlier in the session, as the region’s major bourses and most sectors - except for media - finished in negative territory.

Spain’s IBEX 35 finished 1.4% lower as Madrid drew anger from U.S. President Donald Trump for refusing to allow U.S. forces to use its bases for strikes on Iran. “Spain has been terrible,” Trump said on Tuesday. “We’re going to cut off all trade with Spain. We don’t want anything to do with Spain**.” **Spanish Prime Minister Pedro Sánchez called the Middle East crisis a “disaster” on Wednesday.

The White House then said Spain would cooperate with the U.S. militarily over the Iran conflict but Madrid has categorically rejected this assertion.

Read more: Spain rejects White House claim it agreed to cooperate with U.S. forces amid Iran war

German tank maker Renk recorded 1.37 billion euros (roughly $1.6 billion) in revenue for the 2025 fiscal year, up 19.8% from the previous year, bolstered by strong growth in its defense business, it reported on Thursday.

It saw new order intakes of 1.57 billion euros and a total order backlog of 6.7 billion euros, up from roughly 5 billion euros in 2024. Renk is forecasting revenue of 1.5 billion euros in 2026 amid ongoing geopolitical uncertainty. Its shares ended the session 11.4% lower.

Global market attention remains focused on the U.S. and Israel’s war on Iran, with attacks intensifying over the last 24 hours.

Israel on Wednesday launched a fresh round of attacks on Tehran, with the country’s defense minister vowing to “crush” the Iranian regime’s capabilities. Meanwhile, the U.S. said it has destroyed 17 Iranian ships and nearly 2,000 targets.

In Iran, senior clerics responsible for selecting the next supreme leader are considering naming Mojtaba Khamenei, son of the late Ayatollah Ali Khamenei, to the top post, according to reports.

The U.S. and Israel’s endgame when it comes to “Operation Epic Fury” remains uncertain, and experts have told CNBC they could get bogged down in the war if the Iranian regime proves more resilient than expected.

Oil prices continued to move higher on Thursday, with global benchmark Brent crude last seen up 3.7% to reach at $84.44 a barrel. West Texas Intermediate, the U.S. benchmark, was 6% higher at $79.17 a barrel.

“The Middle East situation is unfolding at a rapid pace, and investors are finding it hard to make a firm call on whether there will be a sustained energy crisis or just a short, sharp shock,” Dan Coatsworth, head of markets at AJ Bell, said in a Thursday morning note.

On Wall Street, the S&P 500 was last seen about 0.7% down as U.S. equities traded lower in the face of rising oil prices.

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