UPDATE 1-European markets dip as investors eye earnings, Iran conflict continues to weigh

As ‌oil prices stay high, economic damage to Europe is likely to be bigger than in other countries," said Marija Veitmane, head ‌of equity research at State Street. "European companies are reporting okay numbers and some of them are ahead of expectations, but the market is not really rewarding them for that (due to the) underlying macro headwinds." U.S. President Donald Trump said he was unhappy with Tehran's latest proposal to end the war, with the Wall Street Journal reporting ⁠that ​the president had instructed aides to ⁠prepare for an extended blockade of Iran's ports.

European shares dipped on Wednesday, as ​investors turned their focus to a packed day of corporate ​earnings, while a continuing U.S.-Iran impasse also kept ‌risk ​sentiment in check. The pan-European STOXX 600 was down 0.3% at 605.02 points, as of 0829 GMT. Most major regional bourses were also lower, with Spain's IBEX 35 and London's FTSE 100 dropping ‌0.9% and 0.5%, respectively.

European equities remain almost 5% below pre-war levels, lagging U.S. peers and global markets, which have rebounded, partly driven by gains in artificial intelligence and technology stocks. "Europe is perceived as one of the largest financial markets victims of the war in Iran. As ‌oil prices stay high, economic damage to Europe is likely to be bigger than in other countries," said Marija Veitmane, head ‌of equity research at State Street.

"European companies are reporting okay numbers and some of them are ahead of expectations, but the market is not really rewarding them for that (due to the) underlying macro headwinds." U.S. President Donald Trump said he was unhappy with Tehran's latest proposal to end the war, with the Wall Street Journal reporting ⁠that ​the president had instructed aides to ⁠prepare for an extended blockade of Iran's ports. Oil prices extended their rally, rising 1%. The energy index added 0.8%.

GSK posted better-than-expected quarterly profit and sales, but shares ⁠fell 1.7%. AstraZeneca was down 1% despite strong quarterly results. Both weighed on the healthcare index, down 0.7%. UBS gained 4.4% after the Swiss bank posted better-than-expected ​first-quarter net profit, while Deutsche Bank reported its largest-ever profit under CEO Christian Sewing. However, its shares fell 2.2%. Eurozone banks ⁠shed 0.5%, while the insurance index fell 1.4%. Both weighed on the broader index. Adidas, however, soared 6.3% after the German sportswear maker reported better-than-expected first-quarter operating profit.

Technology shares ⁠added ​0.8%, after dropping 1.8% on Tuesday. Across the Atlantic, attention will be on the Federal Reserve's policy decision later in the day, expected to be the last under Chair Jerome Powell.

The European Central Bank and the Bank of England meet on Thursday. All three ⁠central banks are widely expected to keep rates on hold, with investors paying close attention to inflation and the growth outlook amid ⁠tensions over the Iran war. Among other ⁠movers, Pernod Ricard lost 2.7% after the French spirits company ended merger talks with Jack Daniel's owner Brown-Forman. Thyssenkrupp shares surged 9.2% after Finnish lift maker Kone said it had agreed to buy German ‌rival TK Elevator in a ‌transaction valued at 29.4 billion euros ($34.4 billion).