European stocks retreated on Tuesday as investors braced themselves ahead of President Donald Trump's deadline for Iran to reopen the Strait of Hormuz, due later in the day.
The pan-European Stoxx 600 index closed almost 1% lower, reversing gains made earlier in the session. Most sectors and major regional bourses ended the session in negative territory.
European markets' Tuesday slide followed a four-day Easter break, after finishing Thursday's session in mixed territory. Â
Investors are struggling to digest the U.S. administration's mixed messaging on a potential resolution to the conflict. Trump has threatened to target Iran's civilian infrastructure if a peace deal is not reached in less than 24 hours, while also signaling that the Iranian leadership was negotiating "in good faith."Â
The president ramped up his rhetoric in a new Truth Social post Tuesday, warning that "a whole civilization will die tonight" if Iran did not reopen the Strait of Hormuz — the vital shipping route for global energy supplies — by 8 p.m. E.T. Earlier, he warned the U.S. would decimate every bridge and power plant within four hours of that deadline not being met.
In equities markets, Commerzbank said that UniCredit's takeover plans have failed to demonstrate sufficient value creation potential for its shareholders.
The German lender said in a statement Tuesday that, following talks between the two banks, it now sees "no basis" for a deal with Italy's UniCredit, and added that it intends to focus on the successful implementation of its standalone strategy.
Frankfurt-traded Commerzbank shares ended 0.5% lower, with UniCredit closing 0.4% lower in Milan.
Shares in Universal Music gained 11.4% in response to a $64 billion takeover proposal by Pershing Square.
UMG will form a newly merged company with billionaire Bill Ackman's flagship hedge fund and list on the New York Stock Exchange, according to the terms of the transaction, which is expected to close by the end of the year.
U.S. markets slipped into negative territory as hopes of a ceasefire agreement faded, with the broad-based S&P 500 last seen 0.8% lower. Asia-Pacific markets whipsawed in volatile trading on Tuesday, with major indices flipping to losses in the morning session, as uncertainty surrounding the war weighs on investor sentiment.Â
— CNBC's Anniek Bao also contributed to this report.