European Midday Briefing: Shares Mixed as Middle East Tensions Weigh, Inflation Data Ahead

MARKET WRAPS

Stocks:

European shares were mixed as investors remained cautious ahead of U.S. inflation data and as continued tensions in the Middle East weighed on sentiment.

Oil prices extended gains for another session as markets remain skeptical that a deal to restore shipping through the Strait of Hormuz is imminent.

"Officials indicated that Iran-Oman talks were at an advanced stage, while President Trump hardened his stance toward Iran and introduced additional demands," said MUFG. "Uncertainty over the timing and terms of a Hormuz agreement is likely to keep a substantial geopolitical risk premium in oil prices."

Meanwhile, the International Energy Agency is expecting a deeper contraction in global oil demand this year as renewed hostilities in the Middle East and disruptions at key shipping chokepoints derail the recovery in supplies, pushing up fuel prices and weighing on consumption.

Investors are now awaiting July CPI data at 1230 GMT for further clues on the Federal Reserve's interest rate path. Markets are pricing a 52.5% chance of a September rate increase by the Fed, LSEG data show.

The inflation data could come in weaker than expected, "helped by more benign energy inputs during the relevant measurement window," Tickmill Group said.

This could strengthen the case for the Fed to keep interest rates on hold in September, it added. Nonetheless, high oil prices, energy supply disruptions and resilient U.S. consumer demand mean that a Fed rate increase remains likely in 2026.

U.S. Markets:

Stock futures edged higher Wednesday ahead of inflation data. Analysts expect year-over-year CPI to come in at 3.4%, down from 3.5% last month.

Forex:

The euro traded steady. The currency's scope to rise against the dollar looks limited even if U.S. inflation data at 1230 GMT are lower than expected, ING said.

The dollar was flat. The greenback faces more volatility due to U.S. inflation data and the ongoing Middle East conflict, Commerzbank said. Bonds:

Yields on eurozone government bonds rose.

Treasury yields traded steady as investors awaited U.S. inflation data at 1230 GMT for clues on whether the Federal Reserve could raise interest rates.

Energy:

In midmorning European trading, Brent crude was up 0.6%, while WTI futures rose 0.6%.

Metals:

Gold prices rose as traders awaited the release of key U.S. inflation data.

"Traders are now focusing on today's U.S. CPI print to gauge whether the recent technical breakout above $4,200 has enough momentum to carry prices towards the next major hurdle, the 200-day moving average near $4,500," Saxo Bank said.

Copper

Copper prices were higher in early trade, supported by tightening supply fundamentals, analysts say. The copper-concentrate market remains characterized by tight ore supply and weak smelting economics, Dongwu Futures said.

Iron ore

Iron ore prices were higher in early trade, thanks to a break in oversupply. Iron ore shipment arrivals at Chinese ports are expected to be stable in the first half of August while steel mills' molten iron production has rebounded, Nanhua Futures said.

EMEA HEADLINES

ABN AMRO Bank Boosts Guidance as Profit Jumps

ABN AMRO Bank raised its full-year interest-income guidance and lowered its cost outlook, after fee growth boosted the bank's net profit for the second quarter.

The Amsterdam-listed lender said Wednesday that net profit jumped to 781 million euros ($901.5 million) in the second quarter from 606 million euros in the year-earlier period. This was ahead of analysts' expectations of 686 million euros, according to consensus estimates provided by the bank.

Vestas Wind Systems Shares Jump on Earnings Growth, Margin Upgrade

Shares in Vestas Wind Systems jumped after the Danish wind-turbine maker posted higher second-quarter earnings and improving profitability, which enabled the company to increase its full-year margin guidance.

In early morning trade, shares jumped 18.5% to 209.9 Danish kroner. Shares are up 21% over the year to date.

Hannover Re Posts Lower Net Profit on Currency Hit

Hannover Re reported a lower net profit for the second quarter, hit by currency headwinds, but said it is on track to achieve its full-year guidance.

The German reinsurer said Wednesday that it made a second-quarter net profit of 695.3 million euros ($802.6 million) compared with 833.5 million euros for the same period last year.

Iran Is Defying U.S. Pressure by Becoming a 'Survival Economy'

DUBAI-President Trump is betting the pressure of sanctions and a naval blockade will force Iran to bend. But the country's rulers are taking time-tested steps to keep their chronically battered economy functioning just enough to resist a drawn-out campaign.

Tehran is rationing scarce goods, limiting access to foreign currency, slashing investment and shifting more of the burden onto households while preserving strategic imports and the essential machinery of the state, analysts say. The result will be a deepening economic malaise that leads to rising poverty and dysfunction, but also more room for Iran's leaders to stall talks with the U.S.

GLOBAL NEWS

Hormuz Standoff Derails Oil Supply Recovery and Deepens Demand Slump, IEA Says

Global oil demand is set for a deeper contraction this year as renewed hostilities in the Middle East and disruptions at key shipping chokepoints derail the recovery in supplies, pushing up fuel prices and weighing on consumption, the International Energy Agency said.

The energy watchdog-a group of Western nations and their allies-now expects global oil consumption to fall by 1.6 million barrels a day in 2026, compared with its previous forecast for a 1-million-barrel-a-day decline. Demand is forecast to fall by 2.8 million barrels a day in the third quarter following a 4.9-million-barrel-a-day drop in the second quarter, before returning to growth in the final three months of the year.

Why Wall Street and Nvidia Are Building an Exotic Money Pipeline for the AI Boom

Nvidia CEO Jensen Huang is running into a problem: Many of his customers can't afford to buy his company's coveted AI-powering chips.

That explains why Huang teamed up with an array of Wall Street firms on a $500 billion plan that will theoretically standardize chip financing, creating asset-backed pools of capital for AI companies-while leaving Nvidia partly on the hook if things go wrong.

Iran Is Defying U.S. Pressure by Becoming a 'Survival Economy'

DUBAI-President Trump is betting the pressure of sanctions and a naval blockade will force Iran to bend. But the country's rulers are taking time-tested steps to keep their chronically battered economy functioning just enough to resist a drawn-out campaign.

Tehran is rationing scarce goods, limiting access to foreign currency, slashing investment and shifting more of the burden onto households while preserving strategic imports and the essential machinery of the state, analysts say. The result will be a deepening economic malaise that leads to rising poverty and dysfunction, but also more room for Iran's leaders to stall talks with the U.S.

Iran Is Defying U.S. Pressure by Becoming a 'Survival Economy'

DUBAI-President Trump is betting the pressure of sanctions and a naval blockade will force Iran to bend. But the country's rulers are taking time-tested steps to keep their chronically battered economy functioning just enough to resist a drawn-out campaign.

Tehran is rationing scarce goods, limiting access to foreign currency, slashing investment and shifting more of the burden onto households while preserving strategic imports and the essential machinery of the state, analysts say. The result will be a deepening economic malaise that leads to rising poverty and dysfunction, but also more room for Iran's leaders to stall talks with the U.S.

U.S. Strikes on Yemen Last Year Killed and Wounded Hundreds, Pentagon Finds

A series of U.S. strikes on Yemen last year killed and wounded hundreds of civilians, according to an internal Pentagon assessment that was sent to Congress on Tuesday.

The report marks the first formal acknowledgment by the Trump administration of the scale of civilian casualties during its 2025 bombing campaign against Iran-backed Houthi rebels.

Rescue Teams in Colombia Dig Through Rubble to Pull Out Quake Victims

BOGOTA, Colombia-The number of people killed in Colombia's 7.4-magnitude earthquake rose to nearly 200, as rescue crews worked feverishly across several cities and towns in the country's west to locate and dig survivors out of the rubble.

"Amid so much pain, I want to express my solidarity with the victims and their families in their suffering," President Abelardo de la Espriella told journalists in the hard-hit city of Pereira. "A tragedy like this plunges all of Colombia into mourning."

Mamdani's Honeymoon With New York Is Over

Zohran Mamdani was riding high as the mayor of New York City earlier this summer, after fulfilling a campaign pledge to put a new tax on the wealthy, flexing his political might with successful endorsements of three progressive congressional candidates and handing the victorious New York Knicks the keys to the city.

Now, after a streak of good fortune, Mamdani is facing growing discontent from New Yorkers upset with his anti-Israel rhetoric and slights against the business community. Efforts to fulfill some of his marquee campaign pledges have stumbled, including the messy launch of the pied-à-terre tax. His relationship with the City Council is fraying.

Write to priscila.barrera@wsj.com

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August 12, 2026 05:11 ET (09:11 GMT)