European stocks eye mixed open as uncertainty surrounds Iran peace prospects

LONDON — European stocks are expected to open in mixed territory on Tuesday as uncertainty lingers over the likelihood of a peace deal to bring an end to the Iran war.

The U.K.'s FTSE 100 index is seen opening flat to lower. Germany's DAX is set to open 0.5% higher, with France's CAC 40 0.4% and Italy's FTSE MIB a touch below the flatline, according to data from IG.

Stocks in the Asia-Pacific region whipsawed in volatile trading overnight after a report said U.S. President Donald Trump was looking to avoid a prolonged conflict in the Middle East.

The Wall Street Journal reported on Monday evening that Trump told aides he was willing to end U.S. military hostilities against Iran even if the Strait of Hormuz remained largely closed.

Trump and his aides are understood to believe an operation directed at reopening the critical chokepoint could prolong the conflict beyond the initial timeline for the war of up to six weeks, the WSJ said.

U.S. stock futures edged up on Monday night and oil prices reversed course to drop in overnight trading following the WSJ report. It came after Trump on Wednesday had threatened to expand attacks to Iran's civilian energy infrastructure, including water desalination plants, if Tehran failed to reopen the Strait of Hormuz.

Earnings come from Hermes International on Tuesday. Data releases include German retail sales, a final reading of U.K. GDP for the fourth quarter of 2025 and EU inflation data.

— CNBC's Anniek Bao contributed to this market report.