European stocks fall as Iran tensions drive oil and bond market moves

European equity markets open lower

The pan-European Stoxx 600 index was down 0.7% shortly after 8:40 a.m. in London (3:40 a.m. E.T.) on Monday, with major bourses in London, Frankfurt, Paris and Milan all trading lower. The weakness in Europe followed declines across Asia-Pacific markets.

By sector, energy stocks rose 0.7% in early trade, supported by higher oil prices. Media stocks gained 1.1%, while all other European sectors slipped into the red.

The market moves came after U.S. President Donald Trump issued a new warning to Iran on Sunday via Truth Social, urging the country to "get moving, FAST" on a peace deal and stating that "the clock is ticking." He warned there "won't be anything left" if action is not taken soon, adding that "time is of the essence." The comments come amid apparent deadlock in negotiations between the U.S. and Iran.

Oil prices rise and bond yields climb

Oil prices advanced overnight, with international benchmark Brent crude futures for July up 1.57% to $110.97 per barrel. U.S. West Texas Intermediate futures for June increased 1.89% to $107.41 per barrel. The rise in energy costs is a key topic for G7 finance ministers and central bankers meeting later Monday in Paris.

The gains in oil prices coincided with a sharp sell-off in global bond markets. The yield on 10-year U.S. Treasurys was last seen up more than 1% at 4.6073%, a 15-month high. In the U.K., 10-year Gilt yields, the benchmark for government borrowing, reached 5.165% on Monday, though they eased by about 1 basis point. In Germany, 10-year bund yields were more than 2 basis points higher at 3.1776%.

Corporate focus: Ryanair results and fuel hedging

Ryanair shares were down 3.3% after the budget airline reported an after-tax profit of 2.3 billion euros ($2.7 billion) for the year ending March, a 40% increase. Despite the strong earnings figure, the stock declined in Monday trading.

Ryanair’s chief financial officer Neil Sorahan said the carrier has hedged 80% of its summer jet fuel and prepared for what he called an "Armageddon situation," reflecting ongoing uncertainty around future oil costs.

FAQ

Why did European stocks open lower on Monday?
European stocks declined as investors reacted to rising geopolitical tensions between the U.S. and Iran, higher oil prices, and a sell-off in global bond markets.

Which sectors gained despite the broader market decline?
Energy stocks rose 0.7% and media stocks gained 1.1%, while all other European sectors traded in negative territory.

How did oil prices move in early trading?
Brent crude futures for July increased 1.57% to $110.97 per barrel, and U.S. West Texas Intermediate futures for June rose 1.89% to $107.41 per barrel.

What happened to Ryanair’s shares after its earnings report?
Ryanair’s shares fell 3.3% even though the airline reported a 40% increase in after-tax profit to 2.3 billion euros for the year ending March and outlined extensive fuel hedging for the summer.