Europe’s STOXX 600 hits all-time high after U.S.-Iran peace deal

The STOXX 600 surged to a record on Monday, eclipsing its Feb. 27 peak after the U.S. and Iran agreed to end their war and reopen the Strait of Hormuz.reuters
Brent crude fell sharply as markets priced in restored oil flows, boosting travel and leisure stocks while pressuring energy shares.usnews
The formal signing is set for Friday in Switzerland, with Iran’s nuclear program to be addressed in a separate 60-day negotiation, according to Reuters.reuters

STOXX 600 Hits All-Time High After US-Iran Peace Deal

Europe’s STOXX 600 surged to an all-time high on Monday after the United States and Iran reached a preliminary agreement to end their three-month conflict and reopen the Strait of Hormuz, erasing all war-related losses and surpassing the index’s previous record set in late February.

Record-Breaking Rally

The pan-European benchmark rose 1.2% to 640.94 points by 0711 GMT, eclipsing its previous all-time high hit on February 27. Reuters reported the index was last up 0.9% at 638.53 points as it gave back some early gains. Germany’s DAX and France’s CAC 40 futures had earlier pointed to gains of around 1.5% each. Travel and leisure stocks, sensitive to energy costs, were expected to lead gains, while energy shares faced pressure from falling oil prices.reuters

The rally came as Brent crude fell nearly 4% and U.S. crude dropped almost 5% following news of the deal. The drop in oil prices also lifted gold, which rose over 1% on easing inflation and interest rate concerns.reuters

The Deal

The breakthrough was announced late Sunday by Pakistan’s Prime Minister Shehbaz Sharif, who has served as a mediator, and confirmed by President Donald Trump on his Truth Social platform. “The arrangement with the Islamic Republic of Iran is now finalized,” Trump stated, authorizing “the toll-free reopening of the Strait of Hormuz” and ordering the immediate end of the U.S. naval blockade.cnbc

The formal signing is scheduled for Friday, June 19, in Switzerland. The memorandum of understanding calls for an immediate and permanent cessation of military operations on all fronts, including Lebanon, according to Sharif. Iran’s nuclear program will be addressed in a subsequent 60-day negotiation period.reuters

Context and What Comes Next

The conflict, which began roughly three months ago, triggered a global energy crisis as Iran effectively closed the Strait of Hormuz — a vital chokepoint for global oil shipments. The European Central Bank raised interest rates last Thursday for the first time since 2023 in response to conflict-driven inflation. Markets now anticipate that the peace deal could ease pressure on central banks worldwide.cnbc

The STOXX 600 had previously peaked at around 630 points in late February before the war dragged it lower. Monday’s move above 640 marks a full recovery and fresh record, though the deal’s durability remains uncertain. Iran’s nuclear ambitions, the status of sanctions, and Israeli military actions in Lebanon all loom as unresolved issues heading into Friday’s signing ceremony.nytimes