Key Takeaways

• Broad-based decline: The Stoxx 600 fell 0.9%, Germany’s DAX dropped 1.3%, France’s CAC 40 slid 0.9%, and the U.K.’s FTSE 100 was down 0.4%.
• Ceasefire collapses: Iran and Israel attacked each other for the first time since the April truce — the most serious breach yet.
• How it started: An Israeli strike on Beirut triggered Iranian retaliation, which drew further Israeli strikes on targets in central and western Iran.
• Escalation widens: Alarms warned of new Iranian attack waves on Monday; Israel also intercepted a ballistic missile launched from Yemen.
• IRGC strikes southern Israel airbases: Iran’s Revolutionary Guard confirmed attacking air bases in southern Israel.
• Peace deal “no longer feasible”: An Iranian official told MS NOW that an agreement is no longer achievable at this stage.
• Trump remains optimistic: The president said the strikes would not derail the White House’s ongoing effort to forge a peace deal with Iran.
• Oil climbs: Crude prices advanced on the renewed hostilities, reinforcing energy inflation fears.

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European stock markets opened lower on Monday, while oil prices climbed, following a resumption of attacks between Iran and Israel that threatened to derail talks to end a fragile U.S.-backed ceasefire in the Middle East.

By 03:03 ET (07:03 GMT), the pan-European Stoxx 600 had fallen 0.9%, Germany’s DAX had declined 1.3%, France’s CAC 40 had slid 0.9%, and the U.K.’s FTSE 100 was down 0.4%.

First Direct Iran-Israel Exchange Since April Ceasefire

The strikes marked the first time that Iran and Israel had attacked each other since the shaky truce took effect in April.

Media reports said the latest exchange began with an Israeli strike on the Lebanese capital of Beirut. Israel has been fighting Iran-backed Hezbollah militants in Lebanon, although the conflict had not recently escalated beyond some skirmishes. Tehran then responded with attacks of its own, sparking a retaliation from Israel that its military said hit targets in central and western Iran.

On Monday, Israel said alarms warning of new waves of attacks from Iran had been sounded, adding that it had also intercepted a ballistic missile launched from Yemen, the Wall Street Journal reported. Iran’s Islamic Revolutionary Guard Corps also noted that it had attacked airbases in southern Israel, according to the WSJ.

Peace Deal “No Longer Feasible”

Still, U.S. President Donald Trump said the strikes would not impact the White House’s ongoing effort to forge a peace deal with Iran — although an Iranian official told MS NOW that an agreement is “no longer feasible at this stage.”