European stock indexes ended little changed on Monday as markets awaited a U.S. Treasury announcement on fresh sanctions targeting Iran, a move that could further strain already tense regional relations.
The Stoxx Europe 600 index closed virtually flat, up 0.01% at 654.22 points, with regional benchmarks showing modest declines in Germany and France but gains in the UK. The DAX fell 0.1%, the CAC 40 dropped 0.4%, and the FTSE 100 rose 0.3%. Trading volumes remained subdued as participants weighed geopolitical risks against broader economic conditions.
Oil markets reflected cautious sentiment, with Brent crude futures easing 1.5% to around $91.27 per barrel after a 5% advance last week. The decline followed heightened volatility tied to developments in the Strait of Hormuz, a critical shipping corridor where diplomatic talks between Oman and Iran are scheduled to resume on Tuesday.
The Iranian rial hit a new informal-market low of approximately 2.02 million per dollar, compared with the central bank's official rate of about 1.5 million, underscoring the economic strain on Tehran amid prolonged sanctions pressure. Iranian Foreign Ministry spokesperson Esmaeil Baghaei warned that any escalation would carry "undoubtedly" serious consequences, stating that "our hands are not tied."
U.S. Treasury Secretary Scott Bessent is set to outline new financial measures against Iran in a press conference at 14:00 Brasília time on Monday, describing the initiative as "the largest financial offensive ever mobilized against an adversary." The strategy, referred to by officials as "Economic D-Day," aims to pressure Iran's allies to sever financial ties with Tehran to "deepen their access to global capital" and bolster market confidence.
The announcement follows the expiration of a 90/60-day memorandum of understanding signed in June, which both sides declared dead after failing to reach terms. The previous U.S.-Israel strike on Iran in late February has heightened concerns over further regional escalation, with markets monitoring diplomatic and military developments closely.
