European stocks were cautious on Wednesday, with the STOXX 50 trading around the flatline and the STOXX 600 down 0.1%, hovering near low levels not seen in about a month. Renewed fighting in the Middle East continued to put upward pressure on oil prices, stoking inflation concerns and raising expectations of tighter monetary policy. The bond sell-off also intensified, with European government bond yields climbing further. LVMH fell 1.2% to a 14-month low of €439.55, while Siemens declined 0.9% and Siemens Energy slipped 0.9%. In contrast, L'Oreal gained 1.1%. Telecom stocks were among the strongest performers, with Nokia rising more than 1% after index provider STOXX announced that the company would rejoin the STOXX 50. Banking stocks were also in positive territory, with Deutsche Bank gaining 2.4% and Commerzbank rising 1.5%.