European shares muted as investors assess Iran-Oman talks, U.S. inflation

COMMERZBANK AG

26/08/2026 17:41

Updates with closing levels, adds analyst comments
STOXX 600 ends flat
ECB seen raising rates in September meeting
Banks lead gains, healthcare head losses
SAP slips after disappointing forecast from U.S. software maker Intuit
By Tharuniyaa Lakshmi and Utkarsh    Hathi
Aug 26 (Reuters) - European shares were muted on Wednesday, as investors assessed talks involving Iran and Oman over the Strait of Hormuz, while sticky U.S. inflation data marginally increased expectations of a Federal Reserve rate hike next month.
 A senior Iranian source said that Tehran and Oman were still working on the details of an agreement on the Strait of Hormuz - the waterway that handled one-fifth of global oil and gas shipments before the U.S.-Iran conflict began.
 "That (talks) gives a bit of hope that at some point the solution will be found. But this (uncertainty), we see it more as a risk than something that we really incorporate in our forecasts," said Joost Van Leenders, senior investment strategist at Van Lanschot Kempen Investment.
 The reopening of the waterway, however, still hangs on the U.S. meeting Iran's conditions. While crude prices have slipped below $90 a barrel in recent days, elevated prices of gasoline and refined oil products have kept inflation very much in focus in Europe.
 The pan-European STOXX 600 .STOXX closed 0.01% lower at 656.41 points.
 The European economy has remained resilient and fared better during the energy shock than anticipated, keeping investors optimistic.
 "What's positive for Europe is it looks like consumers have begun to be more confident, and enough to lower their saving rates, so spending a little bit more, supporting growth in that sense," added Leenders.
 In the U.S., a hotter-than-expected Personal Consumption Expenditure report — the Fed's preferred inflation gauge — modestly increased expectations for the central bank to hike rates in September.
 Among sectors on the STOXX 600, European banks .SX7E led gains with a 1% rise, as Deutsche Bank DBKGn.DE advanced 4.3% to reach its highest since July 2011. Commerzbank CBKG.DE gained 2.8%.

     German Finance Minister Lars Klingbeil plans to meet UniCredit CRDI.MI CEO Andrea Orcel, sources said, in Berlin's first direct engagement over the lender's pursuit of Commerzbank.
European Central Bank policymakers
     are ready to raise rates at their September meeting to counter the economic effects of the Iran war, though they are reluctant to signal further tightening beyond that, three sources told Reuters. 
Investors are also awaiting Nvidia's NVDA.O second-quarter earnings, due later in the day, for clues on whether the AI-driven spending boom can continue to justify lofty market expectations. 
Tech shares .SX8P fell 0.8%, while healthcare shares .SXDP led losses, falling 1%.
Among individual stocks, Britain's Hochschild Mining HOCM.L climbed 5.4%, among the top gainers on the benchmark as a surge in gold prices this year boosted first-half revenue.
SAP SAPG.DE fell 2.9% and was the biggest drag on the benchmark after U.S. software maker Intuit INTU.O issued a disappointing forecast, while UBS downgraded the German software group to "neutral".

(Reporting by Tharuniyaa Lakshmi and Utkarsh Hathi in Bengaluru; Editing by Sonia Cheema and Gareth Jones)
((tharuniyaa@thomsonreuters.com; utkarshtushar.hathi@thomsonreuters.com))