European stocks opened subdued for the trading week. Fresh strikes between the U.S. and Iran dampened hopes for an imminent deal to end their conflict.
The pan-European Stoxx 600 slipped 0.2%. Germany's DAX and France's CAC 40 were broadly flat. The UK's FTSE 100 dropped 0.3%.
Eurozone government bond yields rose, reflecting bets that the European Central Bank may raise interest rates amid energy-driven inflation fears.
Germany's 2-year bond yield rose 5 basis points to 2.585%. The 10-year yield climbed 4 bps to 2.9757%.
Brent crude futures jumped 3.1% to $93.96 a barrel. Oil remains below recent peaks above $100 but well above pre-war levels, fueling inflation concerns.
The U.S. military bombed radar and drone control sites in Iran after Tehran shot down an American drone. Iran launched retaliatory strikes. Kuwait said it intercepted drone and missile fire.
Investors eye diplomatic efforts to end the Middle East hostilities. A deal could reopen the Strait of Hormuz, a vital waterway for oil and gas tanker traffic.
U.S. President Donald Trump said Iran wants an agreement. Both sides continue talks on key issues, including Tehran's nuclear ambitions.
