Thursday's tech rally proved insufficient to restore lasting investor confidence. Markets are now preoccupied with the economic fallout of the conflict in Iran, as a fresh batch of data reveals the first signs of returning inflation.

Asian markets had already set the tone. In Tokyo, the Nikkei dropped sharply following reports that Japanese wholesale price inflation recorded its steepest rise in three years this April. This renewed price pressure is stoking fears of a global stagflation scenario, characterized by an economic slowdown coupled with persistent inflation.

Against this backdrop, investors also fear a faster-than-anticipated tightening of monetary policy by major central banks.

On the geopolitical front, as the U.S. President concludes his state visit to Beijing this Friday, Donald Trump stated that he discussed the Iranian situation with his Chinese counterpart, Xi Jinping. According to him, both leaders share a common resolve to prevent Iran from acquiring nuclear weapons.

'The summit meeting between U.S. President Trump and Chinese President Xi did not yield a decisive breakthrough in bilateral relations. However, it did allow for these relations to stabilize. The challenge ahead lies in building upon this understanding. To date, however, no clear path has been charted to resolve the tariff conflict, and the same applies to the thorny issue of Taiwan. Overall, the summit led to a significant easing of tensions and a modest step toward trade rebalancing, but it is far from constituting a structural reset', Commerzbank analysts noted this morning.

By midday, Brent crude was up nearly 3%, trading at 109.64 dollars.

Stocks in motion

In equity news, LVMH is down 1.22% following the announcement of the sale of the Marc Jacobs brand to a joint venture between WHP Global and G-III Apparel Group.

Stellantis has retreated 2.30% after announcing an agreement worth approximately one billion euros with its Chinese partner Dongfeng to produce Peugeot and Jeep branded vehicles in China.

The Parisian benchmark is being dragged down by STMicroelectronics (-5.04%), Safran (-3.28%), and BNP Paribas (-3.13%).

Elsewhere in Europe, Salvatore Ferragamo plunged 13% in Milan, as the Florentine fashion house reported disappointing first-quarter 2026 results, with revenue slightly down at constant exchange rates, missing expectations.

Syensqo climbed nearly 6% in Brussels, after the specialty chemicals group reported reassuring figures for the start of the year, allowing it to maintain its full-year 2026 guidance.

On the data front, investors will be watching this afternoon for the release of the New York Fed's Empire State Index as well as last month's industrial production figures.

In the currency markets, the euro is down 0.33% at 1.1622 dollars.