European Midday Briefing: Oil Rises As Tensions in the Middle East Escalate

MARKET WRAPS

Stocks:

European shares were steady Monday as oil prices rose after weekend tit-for-tat strikes between the U.S. and Iran.

The U.S. conducted multiple waves of strikes on Iranian military targets Sunday while Iranian forces fired at commercial vessels transiting the Strait of Hormuz, The Wall Street Journal reported.

"Escalation has slowed vessels transiting the strait to a trickle, renewing concerns over oil supply tightness through the third quarter , " ING said. "The risk is that this escalates to levels seen early in the war, where neighboring countries and their energy infrastructure are also targeted."

The latest round of strikes sent oil prices higher, reviving concerns about inflation and prospects of tighter monetary policy.

Oil prices surged more than 3.5% after the fresh strikes. Confusion over whether the Strait of Hormuz was open also boosted prices. The U.S. said the Strait was open, while Tehran said it was closed.

Meanwhile, memory chip stocks tumbled in South Korea, prompting a sharp fall in artificial intelligence-related stocks across Europe.

SK Hynix's shares plummeted 15% in South Korea

today on the heels of the memory-chip maker's red-hot U.S. trading debut last week.

Investors are now focusing on the start of a crucial quarterly earnings season and the AI capital cycle, as concerns over AI spending remain.

Looking ahead, industrial production data for the eurozone for May will be released Wednesday, followed by eurozone May trade data on Thursday.

U.S. Markets:

Stock futures were down on Monday after fighting between the U.S. and Iran intensified over the weekend.

Aside from watching developments in the Middle East, investors are now awaiting upcoming U.S. inflation data and Federal Reserve Chair Kevin Warsh's congressional testimony for fresh clues on the outlook for interest rates.

Forex:

The euro rose.

The currency could fall further as renewed U.S.-Iran conflict pushes energy prices higher, ING said.

The dollar declined after the U.S. and Iran traded new attacks, pushing oil prices higher and driving investors towards safe-haven assets.

Data from the Commodity Futures Trading Commission shows that speculators are currently holding large net long dollar positions . CBA expects the dollar to strengthen further over the rest of the year because of U.S. economic exceptionalism.

Bonds:

Eurozone government bond yields rose in opening trade, tracking moves in their U.S. peers.

"With oil volatility making a return, so is rates volatility , " ING said. "Rate markets are sticking to the previous playbook, whereby any move in oil is directly translated to higher inflation swaps and tighter monetary policy expectations."

Bunds remain vulnerable

to renewed confrontation in the Middle East, Commerzbank said.

Treasury yields rose in early trade as oil prices are higher following the weekend's military escalation in the Middle East.

The sharp rise in government bond yields over the past few days cannot be explained solely by shifts in expectations regarding key interest rates but also by fears of rising government debt, LBBW said.

J.P. Morgan entered tactical long positions in 10-year Bunds

with a tight stop and look to take profit below 3%, and also went tactically long in 10-year U.K. gilts.

Energy:

In early European trading, Brent crude was up 3.6%, while WTI futures rose 3.6%.

Metals:

Gold futures slid more than 1%

after fresh strikes between the U.S. and Iran sent oil prices higher, reviving concerns about inflation and prospects of tighter monetary policy.

Iron

Iron ore fell in early trade. Oversupply pressures are likely to intensify as supplies from Australia, Brazil and new sources increase, ANZ Research said.

EMEA HEADLINES

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The U.S. conducted multiple waves of strikes on Iranian military targets Sunday, and Iranian forces fired at commercial vessels transiting the Strait of Hormuz, as the two countries' standoff over control over the critical waterway deepens.

The U.S. military said late Sunday afternoon East Coast time it had launched new strikes against Iran, the third wave in 24 hours. The attacks, like previous rounds, were designed to degrade Iran's ability to launch attacks on commercial vessels transiting the strait and focused on areas near the strait and along the coast, according to a senior U.S. official.

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GLOBAL NEWS

U.S.-Iran Escalation; AI-Related Stocks Slide Across Globe

Oil rallied in early European trade after renewed military escalation in the Middle East, while U.S. stock futures faltered in a fresh round of weakness for artificial-intelligence stocks.

The U.S. conducted multiple waves of strikes on Iran, while Iranian forces once again fired at commercial vessels in the Strait of Hormuz as the two sides intensified their standoff over control of the waterway. Brent crude prices jumped close to 4% in response, while the dollar strengthened and sovereign debt fell across the globe.

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U.S. and Iran Trade New Rounds of Attacks in Fight Over Strait of Hormuz

The U.S. conducted multiple waves of strikes on Iranian military targets Sunday, and Iranian forces fired at commercial vessels transiting the Strait of Hormuz, as the two countries' standoff over control over the critical waterway deepens.

The U.S. military said late Sunday afternoon East Coast time it had launched new strikes against Iran, the third wave in 24 hours. The attacks, like previous rounds, were designed to degrade Iran's ability to launch attacks on commercial vessels transiting the strait and focused on areas near the strait and along the coast, according to a senior U.S. official.

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July 13, 2026 05:16 ET (09:16 GMT)