A single social-media post flipped the script: President Trump’s announcement that he had told the U.S. military to pause strikes on Iranian power plants for five days sent European equities surging and crude into a tailspin.
By 07:45 ET the Stoxx 600 had erased early losses and turned positive, Germany’s DAX jumped 1.5%, France’s CAC 40 added 1.1%, and Britain’s FTSE 100 was flat.
The catalyst was Trump’s claim of “productive” talks with Tehran; Iran’s Fars news agency denied any contact and said the White House backed down only after Tehran warned of retaliatory hits on West Asian energy hubs.
Oil markets bought the de-escalation story. Brent futures slid 5.9% to $100.54/bbl and WTI cratered 6.9% to $91.52/bbl—both still well above the ~$70 pre-conflict mark. European gas prices had spiked earlier after a Qatari LNG facility was caught in Iranian reprisals; Europe is among the Gulf state’s largest LNG customers.
The European Central Bank added another layer of tension last week, warning that prolonged fighting could reignite inflation and pledging to adjust rates if needed—markets now price a nontrivial chance of a hike.
Thomas Mathews, Head of Markets, Asia Pacific, at Capital Economics, said:
"Escalation in the war remains bad news for asset markets."
The five-day pause provides temporary relief, but with talks still fragile and the ECB already signaling rate-hike readiness, traders may have limited room for complacency.
⚠️ LEGAL DISCLAIMER: This article is for informational purposes only and does not constitute financial or investment advice.
Source: Investing