U.S. markets fell sharply the previous day, with closing losses of more than 1.6% for the S&P 500 and nearly 2% for the Nasdaq 100, as statements from U.S. President Donald Trump regarding the Middle East once again revived investor fears.

He estimated that Iran had waited too long to negotiate and would now have to 'pay the price', further fueling concerns about a conflict that continues to bog down. For its part, Tehran announced that it would review its diplomatic dialogue with Washington.

In fact, the latest events on the ground confirm the fragility of the ceasefire between the United States and Iran, with new strikes by the U.S. military on the territory of the Islamic Republic leading to reprisals from the latter.

Tightening expected from the ECB this afternoon...

It is against this backdrop of renewed geopolitical tensions, likely to further fuel inflation, that the European Central Bank (ECB) is due to announce its monetary policy decision early this afternoon, following the meeting of its Governing Council.

'Given its recent communication, the ECB has no choice but to raise its rates', Oddo BHF noted earlier this week, highlighting that the Frankfurt-based institution will thus be the first of the major central banks to tighten its monetary policy in response to the oil shock.

'The new projections from the ECB staff will be adjusted since the conflict in the Middle East is taking longer to resolve than initially hoped. The ECB will therefore raise its inflation forecast for the central scenario (a slower return to target) and also reduce its growth outlook', it further predicted.

...but not from the Fed next week

Early this afternoon, investors will also take note of producer prices for May in the United States, a day after the announcement of an acceleration in U.S. inflation at the consumer price level, at an annual rate of 4.2% compared to 3.8% in April.

'As expected, U.S. consumer prices rose sharply in May, up 0.5% compared to April', Commerzbank acknowledged yesterday, adding however that, 'as in March and April, the main reason is the rise in gasoline prices due to the war in Iran'.

'Otherwise, inflationary pressure remains within reasonable limits, as evidenced by the core rate', the German bank judged, deducing that 'the Federal Reserve is therefore likely to overlook the rise in inflation without raising key interest rates' during its FOMC meeting next week.

A frosty reception expected for Oracle results

Furthermore, investors are also expected to react, at the opening of Wall Street this afternoon, to the publication of the fiscal fourth-quarter results of enterprise software giant Oracle, a release that could receive a frosty reception given after-hours trading.

The group nevertheless slightly exceeded expectations in terms of its adjusted EPS, which grew by 24% to USD 2.11 (versus USD 1.95 expected), as well as its revenue, which rose by 21% to USD 19.18 billion (versus USD 19.09 billion anticipated), thanks to the strength of its cloud revenue which jumped 47% to USD 9.9 billion.

'While the order backlog continues to grow, the key debate is about revenue conversion', Jefferies reacted however, pointing to a much smaller revenue beat than in the previous quarter and an unchanged revenue forecast of USD 97 billion for the 2026-27 fiscal year.

Corporate news in Paris...

In Paris corporate news, Airbus announced yesterday evening the signing of a 345 million euro contract with Thales Alenia Space, the industrial prime contractor acting on behalf of the European Space Agency (ESA), to develop and produce two C-band radars for the Sentinel-1 NG constellation.

Figeac Aéro unveiled its accounts for its 2025-26 fiscal year, notably marked by an operating profit up 26% to 28.2 million euros, on revenue up 12.6% to 486.8 million euros, in line with the annual target set between 470 million euros and 490 million euros.

Compagnie des Alpes indicated that its 78%-owned subsidiary STGM had received 127 million euros following the transfer, on June 1st, of the operation of the Tignes ski area to the local public company ALTTA. It intends to allocate all of these funds to financing its development projects.