European stock markets barely moved on Monday as traders balanced rising gold prices against uncertainty over U.S. sanctions on Iran. The pan-European STOXX 600 index edged up just 0.03% to 654.38 points in early trading.
The STOXX 50 slipped 0.2% to 6,450, showing the cautious mood more clearly. Investors were not willing to take on much risk with several major events coming later in the week.
The U.S. has threatened what it described as “the greatest financial offensive ever marshalled” against Iran. The sanctions are aimed at Iran’s trade partners, adding pressure across global markets.
Iran responded by warning it could shut down all oil exports from the Gulf if the economic pressure continued. That threat kept energy markets on edge.
Brent crude was trading at around $93 a barrel, pulling energy shares down 0.6%. The threat of supply disruption from Iran was already being priced into markets.
Travel and leisure stocks bucked the trend, rising 1%. Lower oil prices were seen as a positive for that sector.
Basic resources stocks gained 0.7% as gold climbed on a weaker dollar. Gold spot prices were up 0.83%, trading near $4,642.
Automobile and parts stocks fell 0.5% despite data showing European electric vehicle sales picked up in July.
The tech sector was under pressure ahead of Nvidia’s quarterly results due Wednesday. Investors are worried the chipmaker may struggle to meet the very high expectations already built into its share price.
Nvidia shares were down 0.98% in pre-market trading. Any disappointment in the results could ripple across European tech stocks.
Fed Chair Kevin Warsh is due to speak at Jackson Hole in Wyoming on Friday. Markets are watching closely for any signals on the U.S. interest rate path.
Jefferies analyst Mohit Kumar said Warsh is likely to stress the Fed’s readiness to act on inflation. Warsh has previously opposed expanding the Fed’s balance sheet.
Money markets are now pricing in the ECB’s deposit rate reaching close to 3% by late 2027. That follows a rate hike in June after an energy shock linked to the U.S.-Iran conflict.
The ECB is widely expected to raise rates by another 25 basis points at its September meeting.
In corporate news, Shell edged down 0.1% after reports that Exxon Mobil and other potential buyers have shown interest in Shell’s U.S. chemical assets.
Investors are also waiting for U.S. Treasury Secretary Scott Bessent’s press conference for more details on the Iran sanctions plan.
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