European stock markets recovered from their morning losses, easing concerns about a potential escalation of the conflict between Iran and Israel. Investors were once again on edge due to the latest developments in the Middle East, with reports of Israel attacking Iran in response to a prior major attack. Despite no initial reports of damage, fears of a conflict in the Middle East and uncertainty surrounding U.S. interest rate policy continued to affect the stock market.
Throughout the afternoon, European stock exchanges showed signs of stabilization as both Iran and Israel appeared to be attempting to de-escalate tensions. However, concerns about inflation and interest rate policies persisted, remaining a focal point for markets in Europe and overseas.
In Japan, the Nikkei 225 index experienced a significant decline due to fears of an escalating conflict in the Middle East, impacting stocks of Japanese suppliers to the semiconductor industry. However, stocks of logistics companies rose as investors anticipated higher freight rates in the event of a war.
While technology companies faced losses throughout the day, major European stock indexes showed improvement as investors remained cautious about what could be a challenging earnings season for technology companies. In Korea and other Asian stock exchanges also saw losses as they temporarily halted their record-breaking streaks that had been set by Japan’s recent growth spurt. Despite these challenges, analysts at Nomura believe that markets may respond positively to economic strength and robust corporate profits starting in May.