The Spanish benchmark index thus extended the behavior of the previous session, when it closed virtually flat.
Prospects for a swift exit from the conflict are becoming increasingly complex. A U.S. source indicated that President Trump is dissatisfied with the latest Iranian proposal to end the war that began two months ago, although the ceasefire remains in place.
The situation leaves the standoff at a deadlock, with the supply of energy and other commodities through the strategic strait effectively disrupted.
The surge in oil and gas prices resulting from the conflict has revived inflationary fears and shifted the narrative for central banks. Rate cuts are no longer expected this year; in some cases, markets are even beginning to price in potential hikes.
This week could provide greater clarity in this regard, with meetings scheduled for four of the major central banks.
On Tuesday, the Bank of Japan kept interest rates unchanged, in line with expectations, although three of the nine members of its monetary policy committee proposed raising the cost of borrowing.
This will be followed by meetings of the Federal Reserve --with an announcement and press conference on Wednesday-- and the Bank of England (BoE) and the European Central Bank (ECB) on Thursday.
All are expected to hold rates steady, but attention will focus on policymakers' comments regarding price pressures.
In addition to central banks, investors are closely monitoring quarterly results this week from tech giants Microsoft, Alphabet, Amazon, Meta Platforms, and Apple. These will serve as a litmus test for the meteoric rise of some of these stocks, driven by artificial intelligence, during the month of April.
'We expect a session with limited movement and thin volumes, similar to yesterday, with investors in 'wait-and-see' mode ahead of the Federal Reserve (Wednesday) and European Central Bank (Thursday) meetings, as well as the earnings releases from five of the 'Magnificent Seven',' Bankinter analysts said in their morning note.
'There is a risk of volatility given potential geopolitical developments, but the consensus points to a neutral to slightly positive bias in New York, driven by the tech sector,' they added.
At 0702 GMT on Tuesday, the Spanish IBEX 35 was up 55.40 points, or 0.31%, at 17,748.30 points, while the pan-European FTSE Eurofirst 300 index slipped 0.17%.
In the banking sector, Santander rose 0.29%, BBVA fell 0.05%, Caixabank advanced 0.92%, Sabadell gained 0.63%, Bankinter appreciated by 0.90%, and Unicaja Banco climbed 0.75%.
Among non-financial heavyweights, Telefónica edged up 0.05%, Inditex advanced 0.35%, Iberdrola gained 0.30%, Cellnex remained unchanged, and oil major Repsol rose 1.32%.
(Reporting by Tomás Cobos; editing by Benjamín Mejías Valencia)
