European stocks set to rise as U.S. and Iran move closer to deal
European stock markets are expected to open higher on Monday after new signals emerged of possible progress in talks between the United States and Iran. Lower oil prices eased investor concerns about inflation and potential supply disruptions through the Strait of Hormuz.
Highlights
- European futures point to gains: CAC 40 +0.9%, DAX +1.1%.
- The FTSE 100 is closed for a UK public holiday.
- The Nikkei 225 moved above 65,000 points, supporting global risk appetite.
- The main market driver is expectations around the Strait of Hormuz and oil supplies.
Futures point to gains in Europe
According to IG futures market data, France’s CAC 40 is expected to rise by around 0.9%, while Germany’s DAX is seen gaining about 1.1%. The UK’s FTSE 100 is closed on Monday for a public holiday, CNBC reported.
European indexes are following Asian markets higher, where sentiment improved after reports that diplomatic contacts over Iran were continuing. Japan’s Nikkei 225 rose 2.8% to 65,130.03 points, moving above the 65,000 mark for the first time. Markets in Australia and China also advanced, while trading in South Korea and Hong Kong was closed for holidays.
The main factor for markets is the expectation of a possible reopening of the Strait of Hormuz, a key route for global oil shipments. Any signs of de-escalation in the region are quickly reflected in energy prices and in shares of companies sensitive to fuel costs.
Oil decline eases pressure on investors
U.S. President Donald Trump wrote on Truth Social that talks with Iran were proceeding in an “orderly and constructive” way, adding that he had told his representatives not to rush into a deal. After those comments, oil prices fell sharply: U.S. crude dropped to $91.08 a barrel, while Brent fell to $97.08 a barrel.
For European markets, this is especially important because the region is more dependent on imported energy than the United States. Lower oil prices reduce pressure on transport, industry and consumer-facing companies, while also lowering the risk of a renewed inflation shock.
Monday’s open could mark a fifth consecutive day of gains for European markets if positive expectations around the talks hold. Investors, however, will continue to watch whether the comments lead to a concrete agreement and a sustained decline in the geopolitical premium in oil prices.
Energy risk premium fades from prices
The situation around Iran remains the key short-term driver for European stocks. If oil continues to fall, pressure on inflation and corporate costs may ease, supporting the DAX and CAC 40.
But without a confirmed deal, markets remain dependent on headlines: a single new signal of escalation could quickly revive demand for defensive assets and put pressure on equities.
Earlier, we reported that the bond market expects high yields to persist even after the Iran war ends.
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