European Stocks Bounce Back as Trump Shifts Towards Diplomacy

European stocks bounced back on Monday as President Trump announced his intention to hold off on new strikes against Iran, signaling a shift towards diplomatic efforts.

The move sparked hopes for a de-escalation of Middle East tensions and sent crude oil futures plummeting. Brent crude briefly dropped more than 7% to $81.55 per barrel, while West Texas Intermediate (WTI) crude fell over 6% to $79.28 per barrel.

The decline in oil prices eased concerns about inflationary pressures, pushing government bond yields lower across European debt markets. This, in turn, boosted interest-rate-sensitive homebuilder stocks, with Vistry Group up 8%, Bellway gaining 2.8%, and Persimmon rising 2.2%.

However, a decline in pharmaceutical stocks capped gains in the broader market. AstraZeneca plummeted 9% following reports of potential merger discussions with US peer Bristol-Myers Squibb (BMS), sending its ADRs down over 7% and BMS shares up over 8%.