European shares moved higher on Monday as a lull in U.S.-Iran hostilities over the weekend pushed oil prices lower and encouraged investors to take on more risk ahead of a heavyweight week of U.S. technology company results.
The pan-European STOXX 600 climbed 0.8% to 649.34 as of 0706 GMT. The shift in market sentiment followed comments from a senior Iranian official to Reuters indicating Iran would halt attacks if the U.S. did the same, after Washington paused its bombing campaign amid concerns about depleting its arsenal.
Brent crude futures fell about 6% to near $90 a barrel, easing a key cost pressure for many companies. Energy stocks were hit, losing roughly 2%, and, together with utilities, were the only sectors in the STOXX 600 trading lower on the day.
Travel and leisure names led the gains across the market, rising 2.4% as cheaper oil improved the outlook for airlines. Shares of Lufthansa and IAG both rose about 3.7%, while Ryanair added roughly 3.4%.
Investors are heading into a critical earnings stretch in the United States, with quarterly reports from major AI-focused technology companies including Microsoft, Meta Platforms, Amazon.com and Apple due this week. Market participants will be watching those updates for signals on whether the AI-driven rally has further momentum.
Corporate reporting is already active in Europe. Vodafone advanced 3.7% after revising up its outlook following its Safaricom transaction and said it expects to deliver results at the upper end of its revised range.
Overall, the combination of a temporary de-escalation in U.S.-Iran tensions, a meaningful drop in crude prices and a packed earnings calendar set the tone for markets, with sectors tied to energy costs and discretionary travel responding most directly to the change in risk sentiment.