European Equities Slide as Hormuz Closure Fuels Geopolitical Risk

European equity markets faced downward pressure on Friday, driven by a lack of progress in de-escalating tensions between the United States and Iran. The effective closure of the Strait of Hormuz continues to disrupt global energy flows, keeping oil prices elevated and sparking fears of a prolonged geopolitical standoff. The macro environment was further strained by reports indicating the U.S. military may require up to six years to replenish missile stockpiles consumed during the conflict with Iran. This suggests a long-term strategic challenge that may limit immediate diplomatic or military flexibility in the region. Market benchmarks reflected this instability, with the pan-European STOXX 600 declining 0.9% to 608.75. Regional indices followed suit: France's CAC 40 dropped 1.1%, the U.K.'s FTSE 100 fell 0.8%, and Germany's DAX dipped 0.3%. Corporate earnings provided a fragmented backdrop to the geopolitical turmoil. SAP surged 6% after beating first-quarter profit estimates, while Italian energy group Eni gained 1% following a 90% increase in its 2026 share buyback plan. J Sainsbury also advanced 1.5% on the news of a £300 million buyback program. Conversely, some firms suffered sharp losses. Electrolux plummeted 24% after reporting an unexpected first-quarter loss attributed to higher U.S. tariff costs. Other declines included Mondi, which lost 8% on a sharp profit drop, and Evotec, which fell 2.6% following the resignation of its CFO.