European stocks rise 0.5% despite inflation worries

The STOXX 600 rose 0.5% to 610.17 on May 18, recovering from a 0.9% intraday decline. Investors weighed Middle East tensions and oil-driven inflation against corporate deal-making in Germany and Italy. Rising bond yields and ECB rate hike expectations are pressuring equity valuations despite strong earnings from travel and tech.

Brent Crude Oil supply concerns persisted as the Strait of Hormuz remained closed. Investors in the United States and Europe monitored a potential stalemate between Washington and Iran.