Global Market: European shares flat as Middle East risks weigh; Fed Minutes in focus

European shares were little changed on Wednesday as uncertainty over the Middle East kept investors cautious. Gains in basic resources stocks, supported by higher gold prices, helped offset weakness in technology shares ahead of the release of minutes from the U.S. Federal Reserve’s July meeting.

The pan-European STOXX 600 was flat at 652.07 as of 0715 GMT, according to Reuters.

Basic Resources Gain on Higher Gold Prices


Basic resources stocks rose 0.6%, tracking gains in gold prices as investors awaited the Fed minutes for further signals on the U.S. central bank’s interest-rate outlook. The minutes could offer additional insight into policymakers’ views on inflation, economic growth and the timing of potential rate cuts.

Technology stocks were the weakest-performing major sector, falling 0.4% as a sell-off in government bonds pushed yields higher. Higher bond yields can weigh on technology and other growth-oriented companies because they increase the discount rate applied to future earnings.

Semiconductor stocks also came under pressure after reports that Anthropic’s annual revenue run-rate reached $65 billion at the end of July failed to satisfy some elevated investor expectations. Reuters reported that Soitec led sector losses, falling 4.4%, while Nordic Semiconductor and Scout24 declined between 2.1% and 2.3%.

Middle East Risks Keep Investors Cautious

Geopolitical uncertainty remained a key concern for markets after U.S. President Donald Trump said on Tuesday that no talks were taking place with Iran and maintained that the Strait of Hormuz remained open.

The comments contradicted Iran’s assertion that the strategically important waterway was closed to shipping, according to Reuters. Any disruption to traffic through the Strait of Hormuz could have significant implications for global energy markets because the route is critical for oil shipments.

Higher energy prices have already added to concerns over inflation and the outlook for interest rates, increasing the sensitivity of equity markets to developments in the region.

UK Inflation Rises

In Britain, annual consumer price inflation accelerated to 2.9% in July from 2.6% in June, which had been a 15-month low.

The increase adds to uncertainty over the Bank of England’s monetary-policy outlook as investors assess the pace at which borrowing costs could be reduced. Higher inflation could make policymakers more cautious about further easing.

For European markets, investors were therefore balancing hopes for lower interest rates against renewed inflationary pressures, rising bond yields and geopolitical risks as they awaited the Federal Reserve’s meeting minutes for fresh direction.