European Stocks Close Monday Lower
The pan-European Stoxx 600 index shed 0.82% to close at 621.46 points, with losses spreading across most major sectors and exchanges. The sole bright spot came from oil and gas stocks, which bucked the trend and climbed as surging crude prices reflected mounting anxiety over global supply disruptions.
The selloff was broad and deep. Germany's DAX 40 slid 1.15% to 24,417.80, France's CAC 40 dropped 1.12% to 8,331.05, and Italy's FTSE MIB fell 1.36% to 48,207.02. Spain's IBEX 35 retreated 1.21% to 18,260.90, while London's FTSE 100 posted a comparatively modest decline of 0.55%, closing at 10,609.08.
The market rout was triggered in part by US President Donald Trump, who disclosed Sunday that a US Navy guided missile destroyer had engaged and disabled an Iranian-flagged cargo ship in the Gulf of Oman, after which US Marines boarded and seized the vessel. The dramatic intervention came on the heels of reports that Iran had fired on commercial ships attempting to navigate the Strait of Hormuz earlier the same day.
The incident marks a significant escalation in maritime hostilities, layered atop a naval blockade the US has maintained on vessels entering and departing Iranian ports since last week. Tehran has condemned the blockade as a breach of the existing ceasefire agreement and cited it as a primary reason behind the collapse of peace talks that had been scheduled for Monday in Islamabad.
Trump compounded market anxiety on Sunday by issuing a stark warning: Washington would strike Iranian infrastructure should Tehran refuse to accept US terms for ending the conflict — a threat that landed just days before the ceasefire is due to expire.
Shipping fears deepened further after Iran reversed a declaration it had made just Friday that the Strait of Hormuz was reopened to maritime traffic. By Saturday, Tehran had reimposed restrictions on vessel movements through the critical waterway, with state media citing Washington's failure to honor its commitments as justification.
The turbulence dealt a particularly severe blow to European travel and leisure stocks, which shed 2.5% on the day after rallying in the prior session on hopes of easing regional disruption. Lufthansa shares tumbled 3.4%, while budget carrier EasyJet and holiday group TUI each declined 3.1%.
Energy stocks moved in the opposite direction. The oil and gas sector advanced 1.5%, led by Norwegian energy majors. Equinor gained 1% and Var Energi surged 3.5%, while BP rose 3%, TotalEnergies added 1.8%, and Shell climbed 2.4%.
Crude benchmarks reflected the same anxiety, with both Brent crude and US West Texas Intermediate (WTI) each surging more than 5% during the session — underlining how swiftly geopolitical risk in the Gulf can translate into price pressure at the pump.
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