European markets head for lower open amid Iran peace talks uncertainty

LONDON — European stocks opened in negative territory on Thursday, erasing Wednesday’s gains as investors struggle to decipher mixed messages on the status of Middle East peace talks.

The pan-European Stoxx 600 fell 1.3% shortly after 9:50 a.m. London time (5:50 a.m. E.T.), with all major bourses and sectors trading in the red. The U.K.’s FTSE 100 index was trading 1.2% lower, with Germany’s DAX down 1.5%, France’s CAC 40 down 1% and Italy’s FTSE MIB 1.2% lower.

Miners and technology stocks led declines, with the sectors falling 4% and 2.5%, respectively, as risk-off sentiment returned to markets.

In corporate news, British retailer Next reported strong full-year earnings on Thursday and raised guidance, while warning investors that instability in the Middle East could “restrain growth” in its overseas markets should the conflict persist. Its shares were last seen trading up 5.5%.

“It is also likely to have knock-on effects on costs, selling prices and consumer demand in the rest of the business,” wrote chief executive Lord Wolfson in its latest earnings report.

While Next’s first-quarter sales were described by the CEO as “encouraging,” its European rival Hennes & Mauritz announced subdued sales figures during the first three months of 2026. 

Citi analysts described current trading as “slightly weaker than anticipated.” H&M shares tumbled 5% in early trade upon the release.

Global markets have been struggling to decipher contradictory statements from Washington and Tehran over the last 48 hours regarding the status of peace talks. The U.S. says talks over a proposed peace plan have been taking place, while Iran denies any direct interaction with Washington on the matter.

Iranian Foreign Minister Abbas Araghchi reportedly told state media on Wednesday that officials were reviewing an American proposal to end the war, but said Tehran had no intention of having talks with the U.S.

He added that an exchange of messages between the two countries through mediators “does not mean negotiations with the U.S.,” Reuters reported.

Iran state media reported Wednesday that the Islamic Republic would reject a U.S. ceasefire offer, instead countering with its five-point list that would give Tehran control over the Strait of Hormuz.

Asia markets were mixed in overnight trading, while U.S. stock futures were little changed early Thursday.

European markets will be keeping a close eye on news from the meeting of G7 foreign ministers taking place in France on Thursday and Friday. The wars in Iran and Ukraine will be top of the agenda. Delegations from Saudi Arabia, Brazil, India, South Korea and Ukraine will also be in attendance.