Key Points
- The ongoing conflict between Israel and Iran is intensifying, pushing oil prices higher and making investors nervous.
- The U.S. Federal Reserve will meet this week and is expected to hold its interest rates steady. Still, everyone is watching for signs of future rate cuts.
- Despite the risks, European stock markets opened slightly higher, showing cautious optimism.
- G7 leaders are meeting in Canada, with President Trump’s trade tariffs expected to be a major source of conflict.
European stocks started the week on a positive note, but investors are on edge. They are closely watching the escalating conflict in the Middle East and looking ahead to a packed week of meetings, including a key decision from the U.S. Federal Reserve and a G7 summit in Canada. Stocks in Germany, France, and the U.K. all saw modest gains on Monday morning.
At 3:52 AM ET, the DAX index in Germany slightly dropped 0.011%, the CAC 40 in France gained 0.32%, and the FTSE 100 in the U.K. advanced 0.20%.
Over the weekend, Israel and Iran exchanged more missile strikes, raising fears in the region. The conflict has pushed oil prices higher, but so far, investors seem to be betting that the situation won’t spiral out of control. They are assuming Iran won’t close the crucial Strait of Hormuz to oil tankers, a move that could drag the U.S. into the fight.
The higher oil prices create a headache for the U.S. Federal Reserve, which meets this week. The Fed is caught between a weaker job market and inflation that remains too high. Almost everyone expects the Fed to keep interest rates steady on Wednesday.
The real focus will be on any clues about whether they might cut rates later this year or if the Trump administration’s unpredictable trade policies will keep them on hold. It’s a busy week for central banks worldwide, with meetings also taking place in Japan, the U.K., and across Europe.
Adding to the global tension, leaders of the G7 nations are meeting in Canada, where President Trump’s tariff policies are expected to cause friction. In company news, luxury brand Kering is in the spotlight amid reports it will name a new CEO. Meanwhile, Entain, which owns the betting company Ladbrokes, announced that its U.S. venture, BetMGM, is performing better than expected and has raised its financial forecast.
