{"id":65587,"date":"2026-07-29T02:38:15","date_gmt":"2026-07-29T06:38:15","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/global-markets-react-to-middle-east-escalation-and-european-economic-shifts\/65587\/"},"modified":"2026-07-29T02:38:15","modified_gmt":"2026-07-29T06:38:15","slug":"global-markets-react-to-middle-east-escalation-and-european-economic-shifts","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/global-markets-react-to-middle-east-escalation-and-european-economic-shifts\/65587\/","title":{"rendered":"Global Markets React to Middle East Escalation and European Economic Shifts"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"#\" data-href=\"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/global-markets-react-to-middle-east-escalation-and-european-economic-shifts\/65587\/#Key_Takeaways\" >Key Takeaways<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"#\" data-href=\"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/global-markets-react-to-middle-east-escalation-and-european-economic-shifts\/65587\/#Geopolitical_Instability_in_the_Middle_East\" >Geopolitical Instability in the Middle East<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"#\" data-href=\"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/global-markets-react-to-middle-east-escalation-and-european-economic-shifts\/65587\/#Luxury_Resilience_Hermes_H1_2026_Results\" >Luxury Resilience: Hermes H1 2026 Results<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"#\" data-href=\"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/global-markets-react-to-middle-east-escalation-and-european-economic-shifts\/65587\/#UK_Economic_Outlook_and_Inflation_Persistence\" >UK Economic Outlook and Inflation Persistence<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"#\" data-href=\"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/global-markets-react-to-middle-east-escalation-and-european-economic-shifts\/65587\/#Global_Manufacturing_and_Consumer_Trends\" >Global Manufacturing and Consumer Trends<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"#\" data-href=\"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/global-markets-react-to-middle-east-escalation-and-european-economic-shifts\/65587\/#European_Macroeconomic_Data\" >European Macroeconomic Data<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Key_Takeaways\"><\/span>Key Takeaways<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li><strong>Middle East Tensions Surge<\/strong>: Joint <strong>U.S. and Saudi strikes<\/strong> on Iran-backed groups in Iraq have triggered an emergency security meeting in Baghdad, stoking fears of a wider regional conflict.<\/li>\n<li><strong>Hermes Outperforms Estimates<\/strong>: Luxury giant <strong>Hermes (<a href=\"\/stock\/RMS\">RMS<\/a>)<\/strong> reported <strong>Q2 revenue of \u20ac4.09 billion<\/strong>, exceeding analyst expectations of \u20ac4.07 billion, driven by a <strong>10.2% surge<\/strong> in leather goods sales.<\/li>\n<li><strong>UK Growth Upgraded Amid Inflation Risk<\/strong>: The <strong>NIESR<\/strong> raised its 2026 UK GDP growth forecast to <strong>1.1%<\/strong>, but warned that persistent inflation will likely stay above the <strong>2% target until 2029<\/strong>.<\/li>\n<li><strong>China Handset Market Slumps<\/strong>: Total smartphone shipments in China fell <strong>15.3% year-over-year<\/strong> in June, signaling a significant cooling in consumer demand for mobile technology.<\/li>\n<li><strong>Mixed European Indicators<\/strong>: <strong>Sweden&#39;s Q2 GDP<\/strong> grew by <strong>2.8% year-over-year<\/strong>, while <strong>Norway&#39;s retail sales<\/strong> rebounded with a <strong>1.8% monthly increase<\/strong> in June following a sharp May decline.<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Geopolitical_Instability_in_the_Middle_East\"><\/span>Geopolitical Instability in the Middle East<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Iraqi Prime Minister <strong>Ali al-Zaidi<\/strong> has convened an emergency meeting of the Ministerial Council for National Security following reports of joint <strong>U.S. and Saudi military strikes<\/strong> against Iran-backed militias. The strikes, which reportedly targeted the <strong>Popular Mobilisation Forces (PMF)<\/strong>, were described by Riyadh as a response to recent drone attacks on Saudi petroleum facilities. This development represents a significant escalation in regional hostilities, occurring shortly after high-level diplomatic meetings in Washington regarding Iranian influence.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Luxury_Resilience_Hermes_H1_2026_Results\"><\/span>Luxury Resilience: Hermes H1 2026 Results<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Luxury fashion house <strong>Hermes (<a href=\"\/stock\/RMS\">RMS<\/a>)<\/strong> continues to defy the broader sector slowdown, posting a <strong>recurring operating margin of 41%<\/strong> for the first half of 2026. While <strong>Asia-Pacific revenue<\/strong> (excluding Japan) grew by a modest <strong>2.5%<\/strong>, falling slightly short of the 3.2% estimate, the brand&#39;s core <strong>leather goods division<\/strong> saw double-digit growth. Total <strong>recurring operating income<\/strong> reached <strong>\u20ac3.35 billion<\/strong>, surpassing the anticipated \u20ac3.27 billion, as high-net-worth demand remains robust.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"UK_Economic_Outlook_and_Inflation_Persistence\"><\/span>UK Economic Outlook and Inflation Persistence<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The <strong>National Institute of Economic and Social Research (NIESR)<\/strong> has adjusted its 2026 growth outlook for the United Kingdom upward to <strong>1.1%<\/strong>, citing unexpected resilience in the first half of the year. However, the think tank warned that the &quot;last mile&quot; of disinflation is proving difficult, with price growth expected to peak at <strong>3.8% in early 2027<\/strong>. The report suggests that the <strong>Bank of England<\/strong> may need to maintain higher interest rates for longer to combat these persistent pressures.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Global_Manufacturing_and_Consumer_Trends\"><\/span>Global Manufacturing and Consumer Trends<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>In Asia, <strong>Japan&#39;s machine tool orders<\/strong> for June were finalized at a <strong>52.7% year-over-year increase<\/strong>, reflecting strong global demand for industrial equipment despite a slight dip from preliminary figures. Conversely, <strong>China&#39;s handset market<\/strong> faced a sharp contraction, with <strong>CAICT data<\/strong> showing a <strong>15.3% drop<\/strong> in June shipments. This decline highlights the ongoing challenges for tech manufacturers as consumer replacement cycles lengthen and economic uncertainty persists in the region.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"European_Macroeconomic_Data\"><\/span>European Macroeconomic Data<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>European markets received a flurry of data this morning, showing a fragmented recovery. <strong>Germany&#39;s Import Price Index<\/strong> for May fell <strong>0.7% month-on-month<\/strong>, though it remains <strong>6.1% higher<\/strong> than the previous year, indicating some cooling in imported inflationary pressures. <strong>Sweden&#39;s economy<\/strong> showed strength with a <strong>2.8% annual GDP increase<\/strong> in Q2, while <strong>Norway&#39;s retail sector<\/strong> saw a healthy <strong>1.8% bounce-back<\/strong> in June, recovering from a downward-revised May performance.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways Middle East Tensions Surge: Joint U.S. and Saudi strikes on Iran-backed groups in Iraq have triggered an emergency [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":50383,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center 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