European stocks closed lower Monday as investors continued to monitor geopolitical tensions between the U.S. and Iran, with Washington preparing major new sanctions.
The pan-European Stoxx 600 closed provisionally down 0.3%. Auto stocks led the losses with a 1.2% decline following a Daimler profit warning, while only a handful of sectors traded in positive territory.
The U.S. is threatening to impose "major" new sanctions on Iran on Monday, ramping up the pressure on the Islamic Republic at a time when its economy is straining under the weight of financial restrictions. The threat comes despite a diplomatic push from European leaders to urge restraint from leaders in Washington and Tehran.
On Wall Street, stocks were slightly higher, as investors looked ahead to a key meeting between President Donald Trump and Chinese President Xi Jinping at this week's upcoming G-20 summit.
U.S.-China trade relations were a big focus for traders, as Chinese vice commerce minister Wang Shouwen said Monday that Beijing would like the U.S. to cancel "inappropriate" actions against Chinese technology companies.
Back in Europe, Daimler cut its 2019 earnings outlook Sunday after lifting provisions for issues related to its diesel vehicles by hundreds of millions of euros, sending auto stocks lower across the continent. The company's stock was among the worst performers, down nearly 4%.
Germany's DAX fell over 0.5%, after the Ifo Institute for Economic Research on Monday showed German business morale falling to its lowest level since November 2014, compounding fears of a contraction in the second quarter for Europe's largest economy.
Ifo President Clemens Fuest told CNBC that monetary policy would not save Germany's cooling economy.
In terms of individual stocks, Eurofins Scientific slipped almost 4% after the French food and biopharma testing company warned of the material impact of a recent cyberattack on second quarter results.
Danske Bank announced Monday that it has dismissed the head of its Danish banking activities, Jesper Nielsen, after thousands of customers paid excessive fees for an investment product. Danske shares closed 3% lower.
At the other end of the European blue chip index, German therapeutic antibody company Morphosys climbed nearly 6% after presenting promising primary analysis data from a clinical trial.