European Markets Close Weak On Tariff, Middle East Conflict Tensions

(RTTNews) - European stocks closed mostly weak on Monday as Middle East tensions and fresh tariff threats by U.S. President Donald Trump weighed on investor sentiment.

The U.S. President announced on Monday that he might raise tariffs on European cars and trucks, saying the European Union had failed to fully comply with a trade agreement negotiated with the US.

Iran's navy reportedly said that it has prevented US ships entering the Strait of Hormuz, after Trump said the US military would help guide stranded vessels today.

Meanwhile, US denied Iranian state media claims that a US vessel was hit by missiles from Iran, adding, "No U.S. Navy ships have been struck."

The latest developments on the U.S.-Iran conflict front pushed oil prices up sharply. Brent crude futures moved past $114 a barrel, gaining over 5%, triggering inflation concerns.

The pan European Stoxx 600 fell 0.99%. Germany's DAX ended down 1.24% and France's CAC 40 lost 1.71%. Switzerland's SMI closed 1.01% down. The UK market remained closed for Bank Holiday.

Among other markets in Europe, Austria, Czech Republic, Denmark, Netherlands, Portugal, Russia, Spain, Sweden and Türkiye closed weak.

Greece, Iceland, Ireland and Norway ended higher, while Belgium, Finland and Poland closed flat.

In the German market, Deutsche Post shed 8%. Continental lost about 4.7% and Adidas drifted down 4.2%. RWE, BASF, Mercedes-Benz, Commerzbank, Allianz, MTU Aero Engines, E.ON, Volkswagen, Vonovia, Scout24, BMW, Daimler Truck Holding, Deutsche Bank and Deutsche Telekom fell 1.7%-3.5%.

Rheinmetall moved up nearly 3%. SAP gained about 1.8%, while Brenntag gained 1.2%.

In the French market, EssilorLuxottica, Societe Generale, ArcelorMittal, Air Liquide and Saint Gobain shed 3.2%-4%.

Sanofi, Safran, Schneider Electric, Hermes International, Kering, Danone, AXA, Accor, BNP Paribas, Vinci and Eurofins Scientific closed lower by 2%-2.6%. L'Oreal, Veolia Environment, Bouygues, Unibail Rodamco, Stellantis, LVMH and Engie also ended weak.

STMicroelectronics gained about 3.5%. Teleperformance and Capgemini also gained more than 3%. Airbus, Dassault Systemes, Pernod Ricard and Publicis Group posted moderate gains.

In economic news, a report from S&P Global showed the S&P Global Germany Manufacturing PMI was revised slightly higher to 51.4 in April 2026 from a preliminary of 51.2, compared to a 46-month high of 52.2 in March.

Eurozone investor sentiment improved unexpectedly in May, driven by investor expectations that the conflict with Iran would not escalate further, a survey conducted by the behavioral research institute Sentix showed Monday. The investor sentiment index rose to -16.4 in May from -19.2 in April. The score was forecast to fall to -20.9.

The euro area factory activity expanded at its strongest pace in nearly four years in April as manufacturers front-loaded their orders due to fears of the war-induced price increases and supply shock, final data from S&P Global showed Monday. The manufacturing Purchasing Managers' Index rose to a 47-month high of 52.2 in April, in line with flash estimate, from 51.6 in March.