European stocks hold flat as Iran’s Hormuz demands cloud outlook

Global stocks held broadly steady on Monday as Iran announced it was nearing a final agreement with Oman on new shipping lanes through the Strait of Hormuz, offering a glimmer of progress on a geopolitical flashpoint that has kept energy markets on edge for months. However, fresh conditions imposed by Tehran tempered optimism about a swift reopening of the critical waterway.

Hormuz Uncertainty Persists

Iran said additional conditions involving the United States would need to be addressed before the strait could fully reopen, according to Reuters. The development came after new demands from Iran over the weekend raised fresh doubts about the timeline for resuming normal shipping through the passage, which carries roughly a fifth of global oil supply.economictimes+2

Shipping through the waterway remained at a trickle on Monday, keeping Brent crude futures elevated. The benchmark gained 0.6% to $83.98 a barrel in early European trading.devdiscourse+1

European and U.S. Markets Tread Carefully

The pan-European STOXX 600 held flat at 660.12 points as of 0715 GMT, after gaining 1.7% the previous week and closing at a record high on Friday. Energy stocks rose 0.5%, while technology shares led gains with a 0.7% advance. Media stocks fell 0.7%.economictimes+1

U.S. stock-index futures were little changed on Sunday evening, with S&P 500 futures slipping 0.1% and Dow Jones Industrial Average futures falling about 110 points after the strongest week for stocks since April.marketwatch

Inflation Data and Earnings in Focus

Investors are now turning their attention to the July Consumer Price Index report due August 12, which carries added weight given the Federal Reserve held its benchmark rate steady at 3.50% to 3.75% at its most recent meeting. Analysts have flagged the possibility of rate hikes as early as September if inflation fails to cool.cryptobriefing

Meanwhile, European corporate earnings have provided underlying support. Second-quarter earnings for STOXX 600 companies are expected to increase by nearly 21%, up from forecasts of roughly 12.5% growth at the beginning of May, according to LSEG estimates cited by Reuters.economictimes

The combination of progress on the Hormuz negotiations, strong corporate results, and expectations for accommodative monetary policy has kept markets buoyant, but traders remain cautious until the geopolitical picture clarifies further.