European stocks rose Monday as diplomacy between the United States and Iran eased near-term oil-supply concerns, with the FTSE 100 gaining 0.36% in early trade.
U.S. President Donald Trump said envoys held a "very good" three-hour meeting with an Iranian delegation on the sidelines of the United Nations General Assembly in New York. Special envoy Steve Witkoff confirmed that mediators shuttled between the two sides throughout the day and described the round as "successfully completed," adding that another meeting was expected within days.
Iran relayed its conditions through Qatari mediators: a halt to hostilities on all fronts, removal of the U.S. naval blockade and release of seized assets, according to Foreign Ministry spokesman Esmaeil Baghaei, citing state news agency IRNA. A spokesman for Iran's Islamic Revolutionary Guard Corps publicly rejected negotiations and urged the country to prepare for "all likely scenarios."
Brent crude futures fell 0.41% to $98.84 a barrel, while West Texas Intermediate dropped 1.01% to $89.54. Traffic through the Strait of Hormuz remained severely depressed, with only three commodity vessels transiting on Tuesday compared to a ten-day moving average of about 15, data cited by Reuters showed. Meanwhile, Saudi Arabia began restoring crude supply on a critical Red Sea pipeline.
On equities, Germany's DAX added 0.13% and France's CAC 40 rose 0.36%. Sterling edged 0.25% lower against the dollar to $1.3312. Gold futures for December delivery eased 0.31% to $4,362.97 an ounce, with spot gold falling 0.75% to $4,324.98.
Mohit Kumar, a strategist at Jefferies, wrote in a Wednesday note that the first weeks of October could be "the sweet spot for some kind of fudge between US and Iran," as interests on both sides align toward a deal. He noted Iran would likely prefer to avoid an agreement well before the U.S. midterm elections but might favor one just before the vote, when Washington could be more willing to concede. If geopolitical tensions continue to ease and oil falls toward $80-85 a barrel, Kumar said conditions would be set for a rally in risky assets through year end.
UK Prime Minister Andy Burnham spoke at the UNGA, saying Britain would "do all we can" to see Israelis and Palestinians living side by side in peace and security. He described Israeli actions in Gaza and the West Bank as unjustifiable and added, "We will not stand by as the horrific suffering continues to grow."
In corporate news, JD Sports kept its full-year profit guidance unchanged after first-half margins and adjusted profit beat analyst expectations, despite weak sales and a promotional market.
