European stocks closed slightly lower Tuesday amid heightened geopolitical tensions between the U.S. and Iran, as well as ongoing trade uncertainty.
The pan-European Stoxx 600 closed provisionally just below the flatline. Auto and retail stocks led the losses with 1% declines, while basic resources climbed 0.7%.
President Donald Trump on Monday signed an executive order imposing "hard-hitting" new sanctions on Iran, which NBC News reported will deny Iranian Supreme Leader Ayatollah Ali Khamenei and his office access to key financial resources. Iran slammed the sanctions, saying they signaled the end of diplomacy.
Meanwhile, investors are also awaiting a meeting between Trump and Chinese President Xi Jinping at this week's G-20 summit in Japan amid the ongoing trade war between the two nations. A senior U.S. official reportedly said Trump is "comfortable with any outcome" from U.S.-Sino talks at the summit.
On Wall Street, the Dow Jones Industrial Average fell about 35 points following the release of much weaker-than-expected consumer confidence data. The and Nasdaq indexes were also in negative territory.
Back in Europe, the favorite to replace British Prime Minister Theresa May, Boris Johnson, reiterated his threat to take the U.K. out of the European Union in October with or without agreeing a deal with the bloc.
Meanwhile, the EU has indicated that the Italian anti-establishment government may have anywhere between three and six months to demonstrate its commitment to reducing the country's massive debt burden, according to minutes from the latest European Commission meeting.
In corporate news, Nissan Chief Executive Hiroto Saikawa said Tuesday that the carmaker will postpone talks with French partner Renault on deepening their alliance, instead focusing on its own recovery. Renault shares traded 1.6% lower.
French consultancy Capgemini on Monday announced an agreement to buy engineering and digital services company Altran for 3.6 billion euros ($4.10 billion) to tap into the fast-growing engineering outsourcing services market. Altran shares jumped almost 22% higher following news of the deal, topping the Stoxx 600, while Capgemini's stock was up over 8%.
At the other end of the European blue chip index, French telecoms provider Iliad fell 3.5% after Berenberg downgraded the company's stock from "buy" to "hold."
In terms of data, French business confidence figures released on Tuesday showed sentiment for June falling to its lowest since November 2016, down to 102 from 104 in May.