Stock prices on the trading floor of the Euronext NV stock exchange in Paris, France, on Tuesday, Aug. 5, 2025.
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LONDON — European stocks were volatile in early trading on Tuesday and were on course to round-off their worst monthly performance in six years, as uncertainty over the trajectory of the Iran war lingers.
By 10:35 a.m. in London, the pan-European Stoxx 600 was up by about 0.6%, after dipping into negative territory after the opening bell. Regional sectors and major bourses were largely in the green.
Despite clawing back some ground on Tuesday morning, the Stoxx 600 is on course for a monthly decline of 7.8% for March, which would mark its biggest monthly loss since mid-2022.
Inflation in the euro zone jumped to 2.5% in March, according to the latest preliminary figures from Eurostat on Tuesday. Euro zone inflation was up from 1.9% in February and jumped well above the European Central Bank’s 2% target, driven by global energy price rises.
Stocks in the Asia-Pacific region also whipsawed in volatile trading overnight after a report said U.S. President Donald Trump was looking to avoid a prolonged conflict in the Middle East.
The Wall Street Journal reported on Monday evening that Trump told aides he was willing to end U.S. military hostilities against Iran even if the Strait of Hormuz remained largely closed.
Trump and his aides are understood to believe an operation directed at reopening the critical chokepoint could prolong the conflict beyond the initial timeline for the war of up to six weeks, the WSJ said.
Meanwhile, U.S. Secretary of State Marco Rubio told Al Jazeera in an interview published Monday that Washington’s objectives in Iran would take “weeks, not months” to achieve.
“Those objectives are the destruction of their air force, which has been achieved; the destruction of their navy, which has largely been achieved; a significant reduction in the number of missile launchers that they have, which we’re well on our way to achieving; and we are going to destroy the factories that make those missiles and those drones that they are using to attack their neighbors and the United States and our presence in the region,” he said. “We will achieve those objectives. We are well on our way or ahead of schedule. We will achieve them in weeks, not months.”
Oil prices ticked higher on Tuesday morning after dropping in overnight trading following the WSJ report.
It also came after Trump on Monday had threatened to expand attacks to Iran’s civilian energy infrastructure, including water desalination plants, if Tehran failed to reopen the Strait of Hormuz.
Unilever nears deal with McCormick
In corporate news, consumer goods giant Unilever announced on Tuesday that it was in advanced talks with McCormick to merge its foods business with the U.S. spice maker. A deal could be concluded today, the firm said.
“If a transaction were to proceed, it is currently contemplated that it would involve … an upfront cash component of approximately $15.7 billion and the majority of the consideration in McCormick equity,” Unilever said. “Upon completion of the transaction, it is expected that Unilever and its shareholders would hold 65% of the combined company.”
Shares of Unilever were last seen trading 0.4% higher.
— CNBC’s Anniek Bao contributed to this market report.
