The IBEX 35 opened lower on Thursday, in a session dominated by the fresh military escalation in the Persian Gulf and interest rate hike prospects that invite caution, following the benchmark index's nearly 3% gain so far in May.

The deterioration in market sentiment follows the resumption of strikes between the United States and Iran, a further sign that an end to the Middle East conflict and the restoration of fossil fuel transit through the Strait of Hormuz remain distant.

The U.S. military launched strikes against an Iranian drone operation, while Tehran claimed to have hit a U.S. airbase in Kuwait.

With transits through Hormuz still reduced to a trickle, oil prices rebounded by nearly 4% and U.S. Treasury yields rose after President Donald Trump denied the Iranian version of an agreement to restore traffic through the strait.

In parallel, several voices from major central banks have reinforced expectations of tighter borrowing costs. ECB Chief Economist Philip Lane warned that the energy shock resulting from the conflict will likely have a persistent impact on inflation even if peace is achieved, while the Federal Reserve's Lisa Cook advocated for keeping rates steady in the short term, but opened the door to hikes if tariffs, the war with Iran, and AI-related investment continue to put pressure on prices.

In the same vein, Fed Vice Chair Philip Jefferson defended on Thursday the priority of returning inflation to the 2% target, supported by a labor market that has remained 'very resilient' to the current energy shock.

Against this backdrop, brokerage Renta 4 noted that Thursday was seeing a 'double blow to global markets that brings the prevailing optimism to a screeching halt', referring to the exchange of attacks in the Middle East and the hardening of central bank rhetoric.

'The result of the combination of both circumstances is a generalized flight from risk. Investors are taking profits in the face of a scenario of higher energy-driven inflation and more restrictive central banks', these analysts added.

With this background, U.S. inflation data looms as the next threat to bonds and the interest rate path.

Focus now shifts to the PCE or consumption deflator (Thursday at 1230 GMT), the Fed's preferred gauge, where the fuel surge is expected to push the headline rate from 3.5% to 3.8%, which would be a three-year high, and the core rate from 3.2% to 3.3% year-on-year, well above the 2% target.

Meanwhile, at 0700 GMT on Thursday, the Spanish benchmark IBEX 35 fell 68.60 points, or 0.37%, to 18,312.30 points, while the pan-European FTSE Eurofirst 300 index retreated 0.39%.

In the banking sector, Santander lost 0.87%, BBVA retreated 0.52%, Caixabank shed 0.39%, Sabadell fell 0.45%, Bankinter dropped 0.42%, and Unicaja Banco lost 0.57%.

Among major non-financial stocks, Telefónica gained 0.12%, Inditex shed 0.38%, Iberdrola dropped 0.13%, Cellnex gained 0.14%, and oil major Repsol rose 1.56%.

(Reporting by Tomás Cobos; editing by Benjamín Mejías Valencia)