Global markets were cautious on Monday as stalled U.S.-Iran peace talks kept pressure on investors and pushed oil prices higher. Stocks in Europe and the U.S. traded mostly flat, while the dollar strengthened amid fears that the Strait of Hormuz could remain heavily disrupted.
Brent crude briefly jumped more than 4% before easing back near $103 a barrel, extending gains after President Donald Trump called Iran’s latest response to a U.S. peace proposal “totally unacceptable.” The ongoing conflict has sharply reduced traffic through the Strait of Hormuz, a key route for around 20% of global oil and gas shipments.
Despite rising energy prices, global equities held steady as strong corporate earnings, upbeat U.S. economic data, and continued enthusiasm around AI-related stocks supported sentiment. Chinese stocks climbed to multi-year highs, while South Korea’s KOSPI surged more than 4% thanks to strong chipmaker demand.
Analysts warn that a prolonged disruption in Hormuz could increase inflation risks and weigh further on the global economy. JPMorgan said the longer the shutdown lasts, the higher the risk of severe stress in energy markets later this year.
In Europe, the STOXX 600 index was flat, with defense and luxury shares under pressure, while telecom stocks outperformed. Investors are also watching central banks closely as higher oil prices could complicate future interest-rate decisions.
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