Strikes launched by the United States and Iran shattered the fragile truce between the two powers, with market attention also pivoting toward the steady flow of corporate earnings and Friday's U.S. jobs report.
The geopolitical focus remained fixed on the Strait of Hormuz, a strategic corridor through which 20% of the world's oil and gas supply transitioned prior to the conflict.
The United States and Iran clashed in the Persian Gulf on Monday in a struggle for control of the waterway, shortly after President Donald Trump launched an initiative to attempt to open it to stranded vessels and other ships waiting in the vicinity.
In this context, shipping giant Maersk reported that the Alliance Fairfax, a U.S.-flagged vehicle carrier, managed to exit the Gulf through the Strait of Hormuz escorted by U.S. military forces. This fueled signs that the U.S. Navy is loosening the Iranian grip on the strait, potentially facilitating the resumption of supply from the region.
Oil prices reacted with declines, with Brent crude retreating 1.3% to 112.93 dollars per barrel.
On the corporate front, the earnings season continued in Spain with figures from Sabadell -- the worst performer on the IBEX 35 with a 2.15% drop -- which saw its profit fall by 29% due to rising costs and declining interest income. Meanwhile, Unicaja -- down 1.28% -- improved its bottom line thanks to higher fee income and reduced provisions.
A positive catalyst arrived from Italy, where UniCredit posted record quarterly profits.
The earnings calendar is rounded out by figures from Advanced Micro Devices (AMD) and Pfizer, scheduled for later in the day.
Looking ahead to the rest of the week, the U.S. labor market will progressively take center stage.
Partial indicators -- including the JOLTS report on Tuesday and ADP on Wednesday -- will serve as a prelude to the week's main event: Friday's non-farm payrolls for April.
Analysts anticipate the creation of 62,000 jobs, well below the 178,000 recorded in March, although seasonal adjustment issues introduce significant uncertainty into the estimates.
Against this backdrop, markets are pricing in that the Federal Reserve will keep its benchmark interest rate unchanged throughout the year, given the inflationary impact of the global energy crisis.
At 0715 GMT on Tuesday, Spain's benchmark IBEX 35 was up 49.40 points, or 0.28%, at 17,405.50 points, while the FTSE Eurofirst 300 index of leading European shares edged up 0.08%.
Declines predominated in the banking sector: Santander lost 0.45%, BBVA retreated 0.45%, Caixabank shed 0.28%, and Bankinter fell 0.72%.
Among large-cap non-financial stocks, Telefónica gained 1.93%, Inditex advanced 0.67%, Iberdrola rose 0.51%, Cellnex added 0.63%, and oil major Repsol climbed 0.57%.
(Reporting by Tomás Cobos; editing by Benjamín Mejías Valencia)
