Market Wrap: Geopolitical déjà vu. Hormuz once again in the center of investors' attention.

🌍 Geopolitical Situation & Diplomacy

• The United States has conducted another round of airstrikes on Iran, and Tehran has responded with missile and drone attacks on targets in the region, leading to a further escalation of the conflict.

• The Iranian Ministry of Foreign Affairs reports that talks with the US regarding the memorandum of understanding are in a "crisis phase", and Tehran announces that it will not fulfill its obligations until the other side complies with its agreements.

• Iran also reports that attempts to establish a joint mechanism regarding the Strait of Hormuz involving Oman are being hindered by US pressure on that country, which further complicates the diplomatic situation.

• Tensions are causing an increase in oil prices, pressure on financial markets, and the risk of further economic deterioration if the conflict continues to expand.

• The international community is appealing for a return to negotiations; however, military actions between the US and Iran currently continue to intensify.

• The Iranian news agency Mehr News Agency reports that explosions were heard in the vicinity of the Iranian port of Bandar Abbas and Qeshm island.

🛢️ Commodities & Energy

• Crude oil is gaining approximately 2.5% at this moment, reacting to rising geopolitical risks and potential constraints in commodity supply.

• The growing risk of disruptions to oil flows through the Strait of Hormuz increases investor concerns over global energy supplies, supporting the rise in commodity prices and stoking inflation fears.

📈 Stock Market

• The deterioration in market sentiment translates into pressure on risky assets, including semiconductor equities, despite sustained strong interest in the artificial intelligence sector.

• Investors remain focused on the further development of the Middle East conflict and the upcoming quarterly earnings of mega-cap tech companies, which will reveal the health of the AI sector and its growth prospects.

• The session on European trading floors is progressing mostly in slight positive territory, demonstrating the relative resilience of investors despite ongoing geopolitical tensions and rising energy market concerns.

• The strongest performance is seen in indices from Germany and Spain, where the DAX is gaining around 0.1% and the IBEX 35 is rising by about 0.2%, supported by positive sentiment surrounding certain industrial and financial companies.

• France's CAC 40, similarly to the broad European Euro Stoxx 50, remains symbolically in the green.

• The British FTSE 100 is holding close to its opening level with a minor loss.

• Investors in Europe remain cautious, analyzing the impact of Middle East tensions, the situation around the Strait of Hormuz, and a potential rise in oil prices on the economic outlook and central bank policies.

• Despite the uncertainty, equity markets remain stable, and investor attention outside of geopolitics is drawn to upcoming corporate quarterly results and the further growth prospects of the technology sector.

🏭 Sectors & Companies

• Volkswagen is considering the reduction of another 50,000 jobs, as the current austerity program may not be sufficient to improve the company's competitiveness.

• The German manufacturer is struggling with high production costs, pressure from Chinese automotive brands, and slower demand for electric vehicles in Europe.

• Additional cutbacks would complement already planned layoffs, which could mean up to approximately 100,000 job reductions across the entire group.

• The restructuring is intended to help Volkswagen lower costs, but it may spark strong opposition from trade unions and employees.

• European airlines are under pressure following the rise in oil prices triggered by escalating Middle East tensions.

• Higher fuel costs could compress the margins of carriers, who are already facing cost pressures and uncertainty regarding travel demand.

• Shares of companies such as Lufthansa, Ryanair, and TUI are falling, as investors fear a further increase in operating expenses.

• European oil companies are gaining on stock exchanges following the escalation of the US-Iran conflict, which is driving up oil prices.

• Investors fear disruptions to commodity supplies from the Middle East, which increases the valuation of energy giants such as BP, Shell, and TotalEnergies.

• Higher oil prices improve the revenue outlook for fuel producers, but simultaneously increase inflation risks and pressure on other economic sectors.

🪙 Precious Metals

• The precious metals market is experiencing declines, the foundation of which lies in the escalation of the conflict in the Middle East.

• Gold is retracing by about 0.1% and falling below $4,100 per ounce.

• Silver is dropping by over 2% and pulling back below $59 per ounce.

💻 Cryptocurrencies

• Cryptocurrencies also remain under pressure.

• Bitcoin is falling by over 1.3% and testing the $63,000 level.

• Ethereum is losing around 0.1% and sliding below $1,800.