Global stock markets finished without a clear direction on Monday after the American rejection of Iran’s counter-proposal for a lasting ceasefire in the Middle East.
Paris declined (-0.69%) while Frankfurt ended balanced (+0.05%). London (+0.36%) and Milan (+0.76%) closed in slight gains.
In New York, the Nasdaq (+0.10%) and the broad S&P 500 index (+0.19%) once again reached new highs, closing at 26,274.13 and 7,412.84 points respectively. The Dow Jones gained 0.19%.
“The (American) market decided today that geopolitical stakes were just background noise,” commented Steve Sosnick of Interactive Brokers to AFP.
Investors largely ignored the rise in oil prices on Monday caused by the American rejection of Iran’s counter-proposal for a lasting ceasefire in the Middle East, according to analysts.
The Iranian response to the latest American proposal is deemed “to be put in the trash can” by the American president at the White House on Monday.
“There is a slight concern about a possible worsening of the situation in Iran, but for now, nobody is really afraid that this will happen,” said Patrick O’Hare of Briefing.com.
Oil prices are rising Contrary to Wall Street, the deadlock in negotiations has unsettled operators in the oil market as it could “worsen the regional supply shock,” warn analysts from Eurasia Group.
The price of a barrel of Brent crude oil from the North Sea, for delivery in July, rose by 2.88% to $104.21.
Its American equivalent, the West Texas Intermediate barrel, for delivery in June, increased by 2.78% to $98.07.
“No decisive breakthrough is in sight (and) at the same time, traffic in the Strait of Hormuz is at a standstill,” highlight Eurasia experts.
During a telephone call with a Fox News journalist, Donald Trump mentioned considering restarting the operation to protect ships crossing this strait, after more than two months of disruption.
Even in the hypothetical scenario of a reopening of the Strait of Hormuz in mid-May, it would take “45 to 50 days” before a real “relief for the market,” as production resumes and maritime traffic normalizes, estimate analysts from Société Générale.
Only 3.9 million barrels per day pass through the Strait of Hormuz, compared to 20 million before the war, according to energy analyst Helge André Martinsen for DNB Carnegie.
Interest rate tension The rise in oil prices maintains tension on sovereign debt interest rates, awaiting a possible increase in the deposit rate at the next European Central Bank (ECB) meeting in mid-June.
The German 10-year yield, a reference on the continent, reached 3.04% from 3.00% on Friday evening. Its French equivalent stood at 3.66%, up from 3.62%.
Across the Atlantic, the ten-year yield on US government bonds increased to 4.41% from 4.35%.
The US dollar was almost stable against the euro (+0.04%), at 1.1781 dollars for a euro.
US inflation under scrutiny Markets are preparing to receive new data on the rise in prices in the United States, including the Consumer Price Index (CPI) on Tuesday, and the Producer Price Index (PPI) on Wednesday.
“Everyone understands that the rise in energy prices will lead to an increase in inflation. The question is how much,” explained Steve Sosnick.
Figures in line with expectations could support the idea that the Federal Reserve (Fed) does not need to raise rates this year, according to Ipek Ozkardeskaya, analyst for Swissquote Bank.
Before the war broke out, analysts anticipated at least two rate cuts by the US Federal Reserve before the end of the year. No attempts are now expected in 2026, according to the CME FedWatch monitoring tool.
