European equities showed mixed results Tuesday as crude oil advanced for a third consecutive session, brent holding firm above $90 a barrel following warnings from Iranian military officials that they would target U.S. and allied energy infrastructure across the Persian Gulf in retaliation for further strikes.
The pan-European STOXX 600 closed 0.05% lower, while Germany's DAX gained 0.09% and France's CAC 40 rose 0.14%. The FTSE 100 in London slipped 0.05%. German 10-year bund yields hovered near multi-year peaks of 3.36%.
Iranian officials said any further U.S. or allied strikes would be answered by direct attacks on energy assets, including processing facilities, export terminals and transit choke points around the Strait of Hormuz — raising fresh concerns over regional oil-supply disruption.
The oil rally compounded existing inflation pressure in the euro area. Preliminary August CPI data showed headline inflation accelerating to 3.3% year-on-year, driven by a 14.3% surge in energy components. The data adds weight to expectations that the European Central Bank will raise interest rates by 25 basis points at its Governing Council meeting on Thursday, led by President Christine Lagarde. Investment banks including Deutsche Bank have begun pricing in a follow-up hike before year-end, citing climbing energy costs.
On the corporate front, Swiss drugmaker Novartis fell more than 10% after its experimental muscle-disease treatment failed a late-stage clinical trial. Sandoz Group AG rose as much as 5.1%, saying it aims to more than double revenue by 2035 through an expanded biosimilar portfolio and ongoing drug patent expirations. French energy distributor Rubis jumped as much as 5.7% after raising its full-year earnings forecast, reporting an 18% jump in first-half EBITDA powered by high oil prices and strong demand in Africa and the Caribbean.
Across the Atlantic, the Federal Reserve faces its own inflation crossroads. U.S. nonfarm payrolls added 162,000 jobs in August, and investors are weighing whether upcoming consumer-price data will justify another 25-basis-point rate increase at the FOMC meeting scheduled for Sept. 15–16.
