Source: Sharecast
“Stock markets breathed a sigh of relief as US president Trump announces a five-day moratorium on planned strikes on Iranian power plants and energy infrastructure,” noted Axel Rudolph, chief technical analyst at IG.
The pan-European Stoxx 600 rose 0.63% to 576.87, with Germany’s DAX gaining 0.96% to 22,595.25 and France’s CAC 40 advancing 0.79% to 7,726.20.
London’s FTSE 100 underperformed, slipping 0.24% to 9,894.15, having earlier swung between losses and gains.
By mid-morning, the index had briefly traded up 0.2% at 9,936.09, recovering from sharp early declines as sentiment improved.
Dan Coatsworth, head of markets at AJ Bell, said: “Never mind a U-turn, the market performed a handbrake turn with juddering speed on Monday after president Trump suggested the US and Iran were close to ‘total resolution’ on their weeks-long conflict.”
Markets turned higher after Trump said he would postpone “any and all” military strikes against Iranian power plants and energy infrastructure for five days following what he described as “very good and productive conversations” with Tehran.
In a social media post, he stated: “Based on the tenor and tone of these in depth, detailed, and constructive conversations ... I have instructed the Department of War to postpone any and all military strikes ... subject to the success of the ongoing meetings and discussions.”
Rudolph noted that a “Truth Social post by US president Trump citing ‘very good and productive’ discussions between the US and Iran - refuted by Iran's foreign minister - and a five-day halt on planned strikes on Iranian power plants and energy infrastructure provoked a volte face in the oil price, yields, the greenback, precious metals and stock indices.”
However, Iran denied that any talks had taken place, with state media insisting there had been “no direct or indirect contact” with Washington.
Tehran also maintained a defiant stance, warning that any attack on its territory would trigger widespread disruption across the Gulf.
In a statement carried by the Fars news agency, Iran’s defence council said: “Any attempt by the enemy to attack Iranian coasts or islands ... will naturally ... cause all access routes and communication lines in the Persian Gulf ... to be mined ... In that case, the entire Persian Gulf will practically ... be blocked.”
Coatsworth cautioned that “significant uncertainties remain for investors to pick through.
“The Iranian regime has refuted the idea of dialogue with the US and, even assuming a deal can be agreed, questions of how and when the Strait of Hormuz will be unblocked and how quickly shipments through this strategically important body of water can get back to pre-war levels will remain.”
Oil prices fell sharply as immediate supply fears eased, with Brent crude futures last down 9.59% on ICE to $101.43 a barrel and the NYMEX quote for West Texas Intermediate falling 8.47% to $89.91, although both benchmarks remained above pre-conflict levels, reflecting ongoing scepticism about the durability of any diplomatic progress.
Bond markets also reflected the sharp reversal in sentiment.
UK 10-year gilt yields, which had surged to 5.079% earlier in the session on fears of prolonged disruption and higher inflation, later fell back as the prospect of immediate escalation eased.
Coatsworth noted that “gilt yields came down sharply on hopes of a dialling down in tensions, while US markets enjoyed even larger gains as investors reacted with relief to Trump’s apparent about turn.”
Interest rate expectations shifted accordingly, with traders scaling back bets on aggressive tightening and now pricing in two rate hikes for 2026, down from four earlier in the day.
Some US data trickles through the geopolitics
On the data front, US construction spending fell 0.3% month-on-month in January to $2.190trn, reversing a 0.8% rise in December, while the Chicago Fed National Activity Index declined to -0.11 in February from +0.20, signalling a moderation in economic momentum.
Telecom Italia rises on offer, energy stocks in the red
In corporate news, Telecom Italia rose 4.69% after Poste Italiane made a €12.5bn offer for the telecoms group, although Poste shares fell 6.85%.
Delivery Hero gained 7.91% after agreeing to sell its Taiwan delivery platform to Grab Holdings for $600m.
Energy stocks tracked crude lower, with BP down 3.17%, Shell losing 3.6%, TotalEnergies falling 1.37% and Eni declining 3.6%.
Reporting by Josh White for Sharecast.com.