European equities fall as fragile Mideast ceasefire dents risk sentiment

European shares tumbled on Tuesday, as fading hopes of a U.S.-Iran peace deal pushed oil prices higher and kept investors on edge.

U.S. President Donald Trump called the ceasefire with Iran "on life support" with Tehran rejecting a U.S. proposal to end the conflict and proposing a list of demands that Trump dismissed as "garbage."

The pan-European STOXX 600 shed 1.1% to 605.79 points, as of 0703 GMT. Regional bourses also moved lower, with London's FTSE 100 and Germany's DAX down more than 1%.

A closure of the vital Strait of Hormuz has weighed on energy-dependent European markets, keeping them below pre-war levels, as worries remain over the economic impact of the crisis.

Germany's April inflation accelerated slightly to 2.9% in April, official data showed on Tuesday. U.S. inflation data later in the day will also be closely gauged to see the impact of the Iran war.

Among early movers, Germany's Thyssenkrupp fell 2.4% after the conglomerate cut its 2026 sales outlook.

Shares of Bayer gained 1.5% after the German firm reported a better-than-expected quarterly operating profit.

(Reporting by Twesha Dikshit, Editing by Eileen Soreng)

Copyright Reuters or USA Today Network via Reuters Connect.

This story was originally published May 12, 2026 at 12:25 AM.