European shares gain as corporate earnings take centre stage

European shares rose 0.6% on Tuesday, driven by rebounding oil prices, despite ongoing concerns over the Middle East conflict and its impact on global supply and fuel costs.

‌European ​shares inched higher on Tuesday as investors weighed a busy slate of corporate earnings, while keeping an eye on the ‌Middle East after conflicting signals from the United States and Iran over efforts to end their five-month-old war.

The pan-European STOXX 600 index was up 0.6% at 656.27 by 0710 GMT. Energy stocks inched ‌up 0.1% as oil prices rebounded 1% after a sharp selloff in the previous ‌session. Concerns persisted that Middle Eastern supply could remain vulnerable, with a diplomatic breakthrough in the U.S.-Iran conflict — which has disrupted oil shipments — still appearing elusive.

Markets have repeatedly swung between optimism and pessimism since the conflict began ⁠in ​late February, as both ⁠sides have struggled to reach a mutually acceptable resolution. The European benchmark has gained over 5% since the ⁠start of the conflict, recovering from lows hit in March. Travel and leisure stocks fell 0.4%, reflecting renewed ​concerns over elevated fuel costs.

The European earnings season was in full swing, with investors ⁠parsing company updates for clues on the region's business outlook. Shares of Lufthansa dropped 9% after the German airline on ⁠Tuesday ​set a range for its 2026 adjusted operating profit, after that figure more than halved in the second quarter due to higher fuel costs tied to the ⁠U.S.-Iran war.

Zalando fell 13.2% after the retailer forecast 2026 revenue and growth to land in ⁠the lower half ⁠of its previously guided range and narrowed its adjusted operating profit outlook. Shares in Bayer rose 3.7% after the German pharmaceuticals group reported an unexpected ‌1.9% increase ‌in quarterly operating profit.