Europe Stalls as Shaky US-Iran Truce Lifts Oil and Inflation Fears

European shares went nowhere on Monday as investors questioned whether a fragile US-Iran ceasefire would last, while climbing oil prices reignited inflation concerns.

The STOXX 600 was flat at 635.66, ending a choppy week with only slim gains. Germany’s DAX, France’s CAC 40 and Britain’s FTSE 100 barely moved, while Italy’s FTSE MIB dipped 0.2%.

Markets stayed tense after the US and Iran exchanged strikes over the weekend, sparked by an attack on a ship in the Strait of Hormuz. The two sides agreed to pause hostilities before Tuesday’s technical talks in Doha, but the episode kept traders cautious. Crude rose as shipping disruptions through the key chokepoint persisted.

The shift back to geopolitical and energy risks follows a week of tech-driven selling, as stretched AI valuations dragged markets from Tokyo to New York.

Attention now turns to Friday’s US jobs report, a likely deciding factor for Federal Reserve policy and current bets on two rate moves by December. In Europe, June confidence data is due later, and traders will watch ECB chief Christine Lagarde’s speech for policy clues, with at least one more eurozone rate hike expected this year.

Among movers, Nagarro soared 90% on takeover bids, while Prosus gained 2% after full-year results.