European shares dipped on Wednesday, extending losses for a third straight session, as a fragile ‌U.S.-Iran truce weighed on sentiment, while investors also assessed a raft of regional corporate earnings.

Iran seized two ships in the Strait of Hormuz, tightening its grip on the strategic waterway, while U.S. President Donald Trump continued the U.S. Navy's blockade of the Iranian coast.

The ​pan-European STOXX 600 index (.STOXX) ended 0.4% lower at 613.88 points. Major regional bourses were also lower, with ​Germany's DAX (.GDAXI), shedding 0.3% and France's CAC 40 (.FCHI), down 1%. Germany's economy ministry halved its 2026 growth ⁠forecast, while raising its inflation projections.

Geopolitical uncertainty in the Middle East continued to weigh on markets, with euro zone bond yields edging ​up as oil hit $100, as Trump's indefinite ceasefire announcement appeared unilateral, with neither Iran nor Israel signalling whether they ​would honour the agreement.

"We know that the rising energy prices are weighing on demand and on economic growth projections. So unless we do see concrete progress in peace negotiations, I believe that the moves up and down do not necessarily reflect a high conviction direction," ​said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

The energy sector (.SXEP), jumped 2.3%, continuing to benefit from higher oil prices. Materials (.SXPP), and ​technology (.SX8P), inched up 1.7% and 0.6%, respectively.

"It will be interesting to see if tech can withhold the pressure in earnings season and whether investors start to question once again whether companies are over-investing in AI," said Daniela ​Hathorn, senior market analyst at ​Capital.com.

"For now, it's still ⁠a key driver in markets."

Travel and leisure stocks <.SXTP> declined 2.1% as high energy costs and geopolitical uncertainty weighed. Aerospace and defence shares (.SXPARO), lost 2.4%.

Telecommunications (.SXKP), dropped 1.9%. Deutsche Telekom (DTEGn.DE),  slipped 4.8% after reports that ​the company is considering a full combination with T-Mobile US (TMUS.O), that could result in ​the largest public ⁠M&A deal on record.

Global markets have recouped most losses in April following the sharp selloff after the U.S. and Israel war on Iran, but the European benchmark is yet to return to pre-war levels.

ABB (ABBN.S), rose 3.4%, hitting a record high earlier after the Swiss engineering ⁠group raised ​its full-year sales outlook.

Dettol soap maker Reckitt (RKT.L), declined 4.6% after missing quarterly like-for-like ​net revenue expectations for its core business and warning of lower first‑half margins.

On the macroeconomic front, euro zone consumer morale decreased in April, data showed ​on Wednesday.