European shares managed a modest advance Tuesday, recovering from Monday's losses as declining oil prices—spurred by reports of US-Iran mediation—buoyed investor sentiment. The pan-European STOXX 600 index rose 0.1% to 640.61 points by 0831 GMT, even as traders weighed fresh corporate earnings and lingering supply disruption risks. Main Developments Technology stocks led the gains, climbing 0.9% on the index, powered by semiconductor firms ASMI and ASML, which rose 2.1% and 2.8%, respectively. Miners also advanced 0.6%, tracking higher copper and gold prices. On the downside, media shares dropped 1.1%, and personal and household goods fell 0.7%. Oil prices eased from one-month highs after reports of diplomatic efforts between the United States and Iran. However, concerns over energy supply disruption lingered after Yemen's Iran-aligned Houthis announced a blockade of Saudi Arabia on Monday, keeping geopolitical risks front and center. Read also: Thai Baht Slips 0.1% Against Dollar in Tuesday Trading Background The week began with European stocks on the back foot, and Tuesday's uptick reflects a cautious recovery. Earnings reports from major technology companies, including Alphabet in the US, are under scrutiny for clues on whether AI-related demand can sustain high valuations. "We have seen these ebbs and flows in sentiment… that highlights the sort of the nervousness that there is surrounding tech, particularly the AI and chip trade," said Fiona Cincotta, senior market analyst at City Index. "But if we do see another solid season, that could actually be a catalyst for the next leg higher in tech stocks." Among individual movers, Swedish miner Boliden fell 6.9% after a weaker-than-expected quarterly adjusted operating profit. Wienerberger shares slid 6.5% to their lowest since October 2022 after the building materials maker issued a full-year profit warning, citing deterioration in new-build activity. Swiss bank Julius Baer dipped 4.2% despite stronger-than-expected first-half net new money inflows, while lift maker Schindler dropped 5.1% after missing quarterly sales expectations. Novartis gained 2.2% after beating second-quarter core operating profit estimates. Why It Matters The interplay between falling oil prices and geopolitical tensions underscores the fragility of market optimism. Escalating US-Iran tensions could weigh on corporate outlooks, as Cincotta noted, adding uncertainty to earnings seasons. The STOXX 600's narrow gain suggests investors are treading carefully, balancing energy cost relief against potential supply shocks. What's Next This week, focus will also be on the European Central Bank's monetary policy meeting, where policymakers are expected to hold interest rates steady. Market participants are pricing in at least one 25-basis-point hike by end-2026, according to LSEG-compiled data. In Britain, new Prime Minister Andy Burnham appointed former defence secretary John Healey as finance minister, just weeks after he resigned from the previous government with a stinging rebuke of how the Treasury had fallen short on defence spending. Earnings from US tech giants and ECB commentary will likely set the tone for the coming sessions.