[MARKET ANALYSIS] European equities entirely in the red, Rheinmetall disappoints despite increased need for defence; US equity futures continue to consolidate

European bourses (STOXX 600 -1.0%) are entirely in the red, as the Iran conflict continues to intensify. Losses in the IBEX 35 (-0.4%) have been limited after positive Inditex (+2.3%) earnings, which beat Q4 EBIT estimates and boosted capex following a strong start to 2026. The DAX 40 (-1.2%) underperforms after Rheinmetall (-4.9%) missed FY net income and guided softer 2026 revenue than analysts expected.
Sectors are weaker across the board, with Retail (+0.6%) the only one with decent gains as Inditex gains (as detailed above). Real Estate (-1.3%) and Financial Services (-1.4%), alongside Industrial Goods and Services (-1.5%), sit at the bottom of the pile, with higher yields and risk tone weighing on the sectors.
Other key movers include Balfour Beatty (+7.0%), Gerresheimer (-7.9%), and Porsche AG (+1.6%). For the UK infrastructure company, Balfour Beatty beat FY top line estimates and announced a GBP 200mln share buyback programme. For Gerresheimer, the Co. has delayed publication of its 2025 earnings report, which could result in the exclusion of the Co. from the SDAX. Lastly, for Germany's Porsche, the Co. missed FY revenue estimates and guides 2026 revenue and RoS below expectations, but highlighted their continued shift toward cost cutting and streamlining its management structure.
US equity futures (ES/NQ -0.1%, RTY -0.4%) are posting modest losses, the ES is supported following positive Oracle (+9.8% pre-market) earnings after-hours. The Co. reported earnings and revenue above expectations, and raised its FY revenue guidance as cloud revenue surged.