European stocks moved higher on Monday as hopes of a pause in hostilities between the United States and Iran reduced immediate concerns over energy supplies and supported demand for risk assets.
The pan-European STOXX 600 rose 0.7% to 648.9 in morning trading, reaching its highest level since 7 July. The advance followed signs of de-escalation after the United States paused its bombing campaign and Iran indicated that it would respond in the same way, provided the suspension continued.
Oil prices fell sharply as the risk of further disruption eased. Brent crude futures dropped by about 6% to around $90 a barrel. Lower energy prices reduced some of the inflation pressure created by the conflict, particularly for European economies that remain exposed to imported oil and gas costs.
European markets are also preparing for the latest US Federal Reserve decision. The central bank is expected to keep interest rates unchanged at its Wednesday meeting, but its guidance will be closely watched for signals about the rest of 2026.
The STOXX 600 technology index gained 2.4%, while SAP rose another 5.5% after advancing on Friday.
The move came ahead of results from major US technology companies, including Microsoft, Meta Platforms, Amazon and Apple. Their earnings and forecasts are expected to shape expectations around artificial intelligence spending, demand growth and capital investment.
Technology valuations already reflect strong expectations for AI-related expansion. This increases the importance of revenue guidance and evidence that higher spending is producing sustainable commercial returns.
JPMorgan European Discovery Trust plc is an investment trust company. The Investment Trust JEDT objective is to achieve capital growth from a portfolio of quoted smaller companies in Europe, excluding the United Kingdom.
