European equities traded sideways on Tuesday, with the pan-European STOXX 600 index holding flat at 650.84 points.
The lack of directional momentum reflects a market caught between two competing forces: caution over stretched valuations in global artificial intelligence stocks and renewed interest in defence equities.
39% to 8,541 points in early Monday trading, but that brief optimism failed to sustain a broader rally.
The subdued trading session marks a continuation of the hesitation seen earlier in the week.
On Monday, European markets opened with minimal direction as investors digested a reported diplomatic breakthrough between the United States and Iran.
The CAC 40 index had ticked up 0.39% to 8,541 points in early Monday trading, but that brief optimism failed to sustain a broader rally.
Reuters reported that elevated valuations in AI-related names are dictating a cautious stance among portfolio managers.