European Stocks Inch Higher

European stocks closed slightly higher, outperforming North American counterparts with support from lower bond yields. The Euro STOXX 60 inched higher to 6,290 and the STOXX Europe 600 rose 0.2% to 645.6. Sovereign yields fell sharply as the momentary pause in strikes between Iran and the US reignited hopes of LNG and fuel exports from the region, limiting inflationary risks. Banks were sharply higher, with Santander and BNP Paribas adding over 2% while Intesa Sanapaolo rose 1% ahead of its earnings this week. Meanwhile, software producers jumped, tracking Wall Street counterparts ahead of AI hyperscaler earnings this week, with SAP soaring 7.8%. In turn, chip producers remained volatile and sold off after a series of circular investments by Nvidia added to concerns of overspending on the sector. ASML sank 8.4% and Infineon dropped 4.5%. Also, Argenx dropped 2.3% after buying Forte Biosciences for $2.2 billion.

European stocks traded higher on Monday, with the STOXX 50 gaining 1.2% and the STOXX 600 advancing 0.8%. Investor sentiment improved after the US and Iran paused strikes, while Iranian and Omani officials met to discuss measures to ensure the safe passage of shipping through the Strait of Hormuz. These developments eased concerns over the risk of further supply disruptions, triggering a sharp decline in oil prices. The energy sector was the session's weakest performer as lower crude prices weighed on oil and gas stocks, while all other major sectors traded in positive territory. Travel and leisure gained sharply, including Lufthansa (2.9%) and IAG (2.9%). SAP (5%) and Inditex (3%) also booked strong gains. Investors also digested a fresh batch of corporate earnings. AstraZeneca rose 1.7% after reporting better-than-expected profits and reaffirming its earnings guidance for 2026. LVMH gained 1.3% ahead of the release of its first-half results later in the day.

European equity markets were set to open higher on Monday, building on the previous session's gains as investor sentiment improved after the US and Iran suspended strikes against each other amid renewed diplomatic efforts. President Donald Trump is reportedly open to resuming peace negotiations with Tehran, boosting hopes that oil shipments from the Middle East could gradually return to normal. Oil prices also dropped sharply, easing concerns over inflation and the interest rate outlook. In Europe, investors will focus on Germany’s Ifo Business Climate survey for July, while also monitoring earnings from AstraZeneca, LVMH, Michelin, Saipem, and Italgas, among others. In premarket trading, Euro Stoxx 50 futures climbed 0.8%, while Stoxx 600 futures advanced 0.6%.