European stock markets showed a mixed picture on Monday as investors digested fresh comments from President Donald Trump criticizing Tehran's response to a U.S. proposal to end the ongoing hostilities.
By 03:04 ET (07:04 GMT), the pan-European Stoxx 600 was broadly flat. National benchmarks diverged: Germany's Dax inched up 0.1%, the U.K.'s FTSE 100 rose 0.4%, while France's CAC 40 slipped 0.5%.
The political development driving much of the market focus was Iran's apparent reply to a U.S. peace initiative. Iranian state television reported that Tehran had submitted a response centered on concluding fighting on all fronts and seeking compensation for war damage. The statement also reiterated Iran's control over the Strait of Hormuz, the strategic shipping lane off its southern coast through which about one-fifth of the world's oil is transported.
Markets reacted to both the content of Iran's counterproposal and President Trump's immediate reaction. Within hours of Iran's apparent counteroffer, Trump wrote on social media that he did not "like" it. The U.S. plan calls for a rapid end to the war, followed by more detailed negotiations on key issues, with particular emphasis on Iran's nuclear ambitions.
Energy markets were particularly sensitive to the geopolitical developments. Brent crude futures climbed sharply, last up 3.4% at $104.69 a barrel. The strait had been effectively closed during the conflict and, according to the reporting, is now blockaded by both the U.S. and Iran - a dynamic that has helped push oil well above pre-war levels and stoked concerns about higher inflation globally.
Beyond geopolitics, market participants continued to track the ongoing surge in artificial intelligence-related stocks. Strong enthusiasm for AI names has supported U.S. equities in recent sessions, helping them overcome many of the headwinds presented by the conflict and reach fresh all-time highs.
On the corporate front, Delivery Hero was a notable mover. Shares of the food-delivery group climbed by more than 5% after Prosus sold a 5% stake in the company to Hong Kong-based Aspex for 335 million euros.
Investors remain attentive to how the interaction between geopolitical developments and sector rotation - notably energy and AI-related technology names - will shape near-term flows across European markets.