European Midday Briefing: Stocks Fall, Oil Surges Ahead of ECB Decision

MARKET WRAPS

Stocks:

European shares were down on a packed day for central-bank policy decisions, big-ticket earnings and market moves.

Oil prices surged to their highest level since the start of the Middle East conflict and the 10-year Bund yield touched a 15-year high on fears that the U.S. might resume military action in Iran .

After the Federal Reserve held interest rates steady on Wednesday, with officials split on the path ahead, today's immediate focus in the eurozone is the European Central Bank's policy decision.

The ECB is widely expected to keep interest rates on hold but investors will seek clues on how policymakers will respond to the inflationary and growth impact of high oil prices. The Bank of England is also set to hold.

Neuberger expects the ECB to keep its key rates unchanged up to the end of the Middle East conflict .

It anticipates that economic activity will be more impacted than in 2022, "meaning the recession in sight should lead the ECB to cautiously wait for more time."

ING said the jump in crude prices raised the chance of the ECB signaling future rate rises .

Figures out today showed that France's economy had an unexpectedly weak start to the year , while Spain's quarterly GDP growth slowed.

Economic Insight

The BOE is expected to keep interest rates on hold today. But the outlook is becoming more uncertain and hikes look more likely , XTB said.

"The BOE may find it hard to avoid straying into hawkish territory."

Pantheon Macroeconomics said that while not pretty, the slowdown in the French economy in the first quarter was driven by one-off factors that could reverse in the second quarter.

U.S. Markets:

Stock futures were mixed as investors tried to make sense of a deluge of Big Tech earnings and a sudden jump in oil prices.

Earnings from megacap U.S. tech firms announced after the close Wednesday met with divergent responses. Alphabet shares gained sharply premarket, while Meta tumbled.

Danske Bank noted that Jerome Powell's decision to remain as a Fed governor after his term as chair ends prevented Trump from nominating a replacement who favors interest-rate cuts .

Forex:

The dollar turned lower after rising earlier in the European session.

The euro edged higher against the dollar.

ING said the increase in interest-rate rise expectations for the ECB raises the bar for a positive euro reaction to the central bank's decision at 1215 GMT.

Bonds:

Eurozone government bond yields jumped in opening trade, with the 10-year Bund yield hitting its highest level since 2011, as oil prices rose sharply.

The 10-year Treasury yield was hovering near a one-month high reached Wednesday following the Fed's policy meeting, while a renewed rise in oil prices added to inflation concerns.

Energy:

Oil prices surged to a wartime high on fears that the U.S. might resume military action against Iran in order to break deadlocked peace negotiations , threatening to prolong supply disruptions and intensify the global energy shock.

Metals:

Gold prices rebounded, but remained on track for a weekly loss as elevated oil prices fuel concerns over higher interest rates for longer.

"Dip-buying emerged after a three-day decline," MUFG said.

However, "rising Treasury yields further pressured gold, while the ongoing Middle East conflict, now in its ninth week, continues to fuel inflation risks through elevated energy prices and the near-total shutdown of the Strait of Hormuz."

EMEA HEADLINES

Universal Music Logs Strong Subscriptions, Streaming Revenue Growth

Universal Music Group posted robust revenue growth from subscriptions and streaming for the first quarter and said it would channel part of its Spotify stake into a larger buyback program.

The music company behind Lady Gaga and Taylor Swift said it would increase the size of its EUR500 million share buyback to EUR1 billion and monetize half of its equity stake in Spotify to buy back shares.

Stellantis Upbeat on Road Back to Profit

Stellantis said it remains confident of returning to profit this year after swinging to net earnings in the year's first months.

The auto giant, which makes brands such as Jeep, Citroen and Peugeot, said Thursday that it made a net profit of 377 million euros ($440.20 million) between January and March, swinging from a loss of 387 million euros in the same period last year.

Rolls-Royce Sticks to Guidance After Strong Start to Year, Despite Iran War Uncertainty

Rolls-Royce confirmed its earnings guidance after a strong start to the year, despite the Middle East conflict creating uncertainty.

In a statement to be delivered at the U.K. engine maker's annual shareholder meeting Thursday, it said it expects to fully mitigate the current financial impact of disruption from the conflict and will take necessary action to counter any future impacts.

Unilever Sales Rise Amid Split with Foods Business

Unilever booked a rise in underlying sales in the first quarter, as it carries out its largest portfolio shuffle yet to simplify the business.

Underlying sales for the Dove soap-maker rose 3.8% on year in the quarter, above company-compiled analyst estimates of 3.6% growth. Its emerging markets business led underlying sales growth, up 5.7%.

Glencore Sees Trading Boost From Middle East Conflict

Glencore said its trading division could beat a long-term earnings target this year if its first-quarter performance is extrapolated, as the Middle East war is raising costs but boosting commodity prices.

The commodities company said Thursday that higher input costs and a weaker U.S. dollar due to the Middle East conflict are starting to hit its industrial operations, but that it expects stronger commodity prices to make up for the shortfall and potentially result in a margin expansion.

Volkswagen to Accelerate Turnaround Plans as Challenges Mount

Volkswagen backed guidance but said that it would double down on its transformation plans as global challenges intensify.

The German automaker reiterated its target for an operating margin of between 4% and 5.5%, up from the 2.8% it logged in 2025, with revenue landing between flat and 3% above last year's figure.

GLOBAL NEWS

Big Tech Strikes Gold With AI, but at a Steep Cost

Big tech companies are starting to strike gold with artificial intelligence, but investors are still wringing their hands over the multibillion-dollar bets on data centers and chips.

Four of the biggest names in technology-Microsoft, Alphabet, Meta Platforms and Amazon.com-on Wednesday reported earnings showing that sales are growing thanks to the proliferation of AI tools. That progress, however, comes at a steep cost. Capital expenditures on the infrastructure needed to satisfy demand are climbing steadily higher.

Eurozone Economies Gauge Energy Shock in Mixed First Quarter

The eurozone's two largest economies had a contrasting start to the year, with Germany accelerating a little and France slowing down, as both face a jump in energy prices that is set to weaken consumer spending and derail a hoped-for recovery in industry.

The conflict in the Middle East is the latest blow to Europe's hopes for a sustained revival in its economic fortunes, after Russia's invasion of Ukraine in 2022 and President Trump's tariff blitz last year.

Trump Weighs Pulling Some U.S. Troops From Germany in Spat With Chancellor

President Trump said Wednesday he is considering whether to remove some American troops from Germany after its leader criticized the U.S. campaign in Iran.

"The United States is studying and reviewing the possible reduction of Troops in Germany, with a determination to be made over the next short period of time," he said on social media.

Trump Says He Discussed With Putin a Pause in Ukraine Fighting

WASHINGTON-President Trump said Wednesday that he and Russian President Vladimir Putin discussed a pause in military action in Ukraine during a phone call.

"I suggested a little bit of a cease-fire and I think he might do that," Trump told reporters in the Oval Office. "He might announce something having to do with that. Did he announce it yet?" Trump said the two leaders spoke earlier on Wednesday.

Write to gareth.mcpherson@wsj.com

Write to us at newsletters@dowjones.com

We offer an enhanced version of this briefing that is optimized for viewing on mobile devices and sent directly to your email inbox. If you would like to sign up, please go to https://newsplus.wsj.com/subscriptions.

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

April 30, 2026 05:19 ET (09:19 GMT)