European stocks end mixed; DAX falls, FTSE 100 and FTSE MIB gain

European benchmark indices ended the session on a mixed note, with Germany's DAX posting the steepest decline and the UK's FTSE 100 registering the strongest gain.

Closing levels for the major indexes were as follows:

• Frances fell 0.79%
• Germany's DAX dropped 1.09%
• The UK's FTSE 100 added 0.29%
• Spain's Ibex declined 0.34%
• Italy's FTSE MIB edged up 0.1%

Traders in Europe are concluding their session, with markets still concentrating on the upward trend in oil prices, increasing long-term yields, and geopolitical strains linked to Iran.

Addressing the G20 summit, Treasury Secretary Scott Bessent stated that Iran is taking U.S. sanctions seriously and is “lashing out kinetically” because it is losing economically. He further noted that the U.S. will maintain pressure, but Iran's economy does not need to collapse—it simply needs to “come to its senses.”

Regarding the U.S. economy, Bessent mentioned that real wages are rising and that the sole method for the country to reduce its debt is through growth. This implies the administration is counting on economic expansion to tackle the deficit, instead of reducing spending or cutting interest rates. The danger is that climbing oil prices and persistent inflation could hinder that growth trajectory.

Ten-year government bond yields in Europe rose uniformly:

• Germany's yield reached 3.327%, up 3.5 basis points
• France's yield stood at 4.179%, up 4.0 basis points
• The UK's yield was 5.078%, up 3.7 basis points
• Spain's yield was 3.783%, up 4.5 basis points
• Italy's yield was 4.169%, up 6.1 basis points
• Switzerland's yield was 0.426%, up 3.1 basis points

Across the Atlantic, the U.S. Treasury yield curve is steepening. Short-dated yields are slightly lower, while long-dated yields keep climbing:

• The 2-year yield stood at 4.3416%, down 0.8 basis points
• The 5-year yield was 4.5019%, up 2.0 basis points
• The 10-year yield was 4.7600%, up 3.8 basis points
• The 30-year yield was 5.2624%, up 5.4 basis points

American equities are in negative territory, though the main indexes have recovered from their session lows:

• The Dow Jones Industrial Average ended at 53,222.33, down 343.01 points or 0.64%
• The S&P 500 index closed at 7,674.91, down 36.84 points or 0.48%
• The NASDAQ composite finished at 26,291.47, down 110.95 points or 0.42%
• The Russell 2000 index settled at 2,948.31, down 24.06 points or 0.81%

Elsewhere in financial markets:

• WTI crude oil rose $2.14, or 2.56%, to $85.59 per barrel
• Gold fell $25.26, or 0.57%, to $4,428.41
• Silver dropped $0.18, or 0.27%, to $66.15
• Bitcoin was nearly unchanged at $78600

The steep increase in oil prices continues to be a major worry for inflation and economic expansion. At the same time, the upward trend in long-term yields is adding to the challenges for stock markets, especially as investors are still absorbing the more hawkish remarks made by Fed Chair Kevin Warsh on Friday.