European markets are expected to open cautiously on Tuesday as investors continue to assess escalating geopolitical tensions linked to the conflict between the Iran and the United States.

The FTSE 100 in the United Kingdom is seen opening flat, while Germany’s DAX and France’s CAC 40 are both expected to decline by around 0.4%. Italy’s FTSE MIB is projected to edge 0.1% lower, according to IG data.

Global markets came under pressure on Monday after a fragile ceasefire between Washington and Tehran appeared close to collapse. Tensions intensified following reported attacks on the United Arab Emirates involving Iranian drones and missiles. At the same time, the U.S. said it had sunk Iranian boats in the Strait of Hormuz.

In a televised interview, U.S. President Donald Trump warned that Iran would face severe consequences if it targeted American ships protecting commercial vessels in the strait. He also stated that a South Korean cargo ship had come under fire, suggesting that South Korea could consider joining the mission.

The heightened tensions led to sharp declines in global stock markets on Monday, while oil prices surged amid concerns that a prolonged conflict could increase the risk of a global recession. Oil prices, however, eased slightly in early Tuesday trading.

On the corporate front, several major European companies are set to report earnings, including Anheuser-Busch InBev, Intesa Sanpaolo, Ferrari, Geberit, Banco BPM, Covestro and Fresenius Medical Care.

Earlier in the day, Europe’s largest lender, HSBC, reported first-quarter pre-tax profits of $9.4 billion, slightly below analysts’ expectations.

Investors are expected to remain cautious throughout the trading session, with geopolitical developments likely to continue shaping market sentiment.