Shortly before midday, the CAC 40 is edging up 0.2% toward 8,350 points, while the Euro Stoxx 50 gains 0.5%, buoyed by the relative stability of U.S. indices on Monday (with the Nasdaq 100 closing down just 0.3%, for instance).

War uncertainty continues to loom...

However, clarity remains elusive regarding a potential resumption of talks between the United States and Iran in Pakistan, as the 15-day ceasefire between the two nations reaches its deadline Wednesday night.

A U.S. delegation led by J. D. Vance is expected in Islamabad, but Tehran has stated it will not "negotiate under threat" and has warned it will "play new cards on the battlefield" should hostilities resume.

Uncertainty over the Middle East and the fate of the Strait of Hormuz is logically reflected in oil prices: Brent crude is up approximately 1% near USD 95, while West Texas Intermediate (WTI) is seeing similar gains toward USD 87.

"Looking ahead, oil markets are expected to remain highly sensitive to geopolitical developments in the Middle East," warns Abdelaziz Albogdady, market research & fintech strategy manager at FXEM.

"Persistent tensions could continue to drive prices higher, while a credible de-escalation or the restoration of stable shipping conditions could trigger a new wave of massive sell-offs," he adds.

...and weighs on sentiment according to the ZEW index

Illustrating the impact of the geopolitical climate on market sentiment, the ZEW index plunged deep into negative territory this month, falling to -17.2 from -0.5 in March, far below the -5 level anticipated by economists.

This gauge of German investor confidence in the country's economic outlook has thus slipped below its April 2025 low of -14. For context, the index stood at +58.3 as recently as February.

"The economic consequences of the war in Iran for the German economy extend far beyond simple price increases," explains Achim Wambach, president of the ZEW Institute.

According to the economist, German companies "are concerned about long-term energy shortages, which is dampening investment and neutralizing the impact of government stimulus measures."

Furthermore, the assessment of Germany's current economic situation deteriorated for the current month, with the corresponding indicator hitting -73.7, down 10.8 points from March.

Thales shunned following trading update

In individual stock news in Paris, Thales is shedding 4.4%, making it the worst performer on the SBF 120. Investors are penalizing weak results in the Cyber division and the lack of an upward revision to guidance in its latest trading update.

The electronics group nevertheless recorded a dynamic start to the fiscal year, driven by defense, with a sharp increase in order intake and organic revenue growth of nearly 10%.

Elsewhere, Safran is retreating 2.4% after the aerospace supplier lost the backing of Jefferies, which downgraded its recommendation to "hold" from "buy" and slashed its price target from EUR 350 to EUR 310.

In London, AB Foods is dropping 3.5% after announcing plans to spin off Primark, its discount clothing chain, amid half-year results that missed expectations and deteriorating performance in its sugar business.