European equities nudged higher on Monday as investors weighed the ongoing Middle East conflict alongside a busy week of central bank meetings and the upcoming Group of Seven summit in Canada.
By 03:05 ET, Germany’s DAX index was up 0.4%, France’s CAC 40 also gained 0.4%, and the U.K.’s FTSE 100 increased 0.2%.
Middle East Tensions Persist
Israel and Iran continued exchanging missile strikes and air raids over the weekend, following Israel’s large-scale airstrikes targeting Iranian military and nuclear sites on Friday.
While the conflict has unsettled markets and pushed oil prices higher, investors generally do not expect the fighting to spread regionally. Notably, concerns about Iran closing the Strait of Hormuz—a vital shipping lane—remain low, as such a move could escalate U.S. involvement.
Central Banks in Focus
Rising energy prices add complexity to the Federal Reserve’s policy decisions this week, as it balances a cooling labor market against persistent inflation above target levels.
Since easing last December, the Fed has kept rates at 4.25%-4.50% and is widely expected to maintain this range in Wednesday’s announcement. Market participants will closely watch for any signals on potential rate cuts or the impact of ongoing U.S. trade policy uncertainties under the Trump administration.
It’s a busy week globally: the Bank of Japan is expected to hold rates steady Tuesday, with the Bank of England and Norway’s Norges Bank likely to follow later in the week. Meanwhile, Sweden’s Riksbank is forecast to cut rates, and the Swiss National Bank may return to negative rates amid a strong franc.
G7 Summit Outlook
Leaders of the Group of Seven nations gather in Canada this week amid heightened tensions due to U.S. tariffs on allies. Canadian Prime Minister Mark Carney, chairing the summit, emphasized priorities including peace and security, strengthening critical mineral supply chains, and job creation. Key topics will likely include the Middle East conflict, Ukraine, and trade tensions.
Corporate Highlights
Luxury goods group Kering (EU:KER) is reportedly appointing Luca de Meo as its new CEO, following his five-year tenure leading Renault (EU:RNO), according to French newspaper Le Figaro.
In the gaming sector, Entain plc (LSE:ENT) announced that its U.S. sports betting joint venture BetMGM has raised its revenue and earnings forecasts for the year, buoyed by strong growth in iGaming and online sports betting.
Oil Prices Rise on Middle East Risks
Oil prices continued to climb Monday amid concerns over potential supply disruptions linked to the Israel-Iran conflict.
At 03:05 ET, Brent crude futures gained 1% to $74.97 per barrel, while U.S. West Texas Intermediate crude increased 1.1% to $72.05 per barrel. Both benchmarks surged more than 7% on Friday, reaching their highest levels since January, as fears of broader regional conflict grew.
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