European stocks mostly fell Friday, with Germany's DAX down 0.1% and France's CAC 40 off 0.2%, as geopolitical tensions overshadowed a rebound from Thursday's gains. The U.K.'s FTSE 100 was a rare bright spot, adding 0.2%. Markets remain on edge after President Trump threatened potential military action against Iran, warning a U.S. fleet is en route to the region.

The political climate remains tense after Trump rowed back on threats to impose trade tariffs to gain ownership of Greenland. Ukraine's President Zelenskyy criticized European leaders at Davos for being 'lost' in trying to persuade Trump rather than uniting to defend themselves. This backdrop of elevated political uncertainty is keeping a lid on equity gains for a second consecutive week.

Investors are also parsing corporate news. Ericsson announced a hefty share buyback and dividend hike after strong cash flows, while Intel's disappointing first-quarter forecast hit tech stocks. Meanwhile, Brent crude rose toward $64.40, heading for a fifth weekly gain on supply fears tied to the Iran tensions. U.K. retail sales offered a positive surprise, rising 0.4% in December.