Markets adopted a more measured tone on Tuesday as the initial enthusiasm surrounding the Persian Gulf pact began to fade.
U.S. President Donald Trump stated on Monday that Washington and Tehran had signed a preliminary agreement, set to be finalized on Friday, to end the conflict. However, specific details have not yet been made public, and both nations acknowledge that a permanent truce remains subject to further negotiation.
The announcement, while providing initial relief to investors, also places Washington on a potential collision course with Israel.
The deal would extend the fragile ceasefire announced in April for another 60 days and reopen the Strait of Hormuz. Iran has kept the waterway virtually blocked since the United States and Israel attacked the country in February, a move that triggered a sharp spike in crude oil prices.
On Tuesday, oil prices, which closed at three-month lows the previous day, reflected a sense of caution. Brent futures slipped 0.3% to $82.96 per barrel, remaining well above the $72 level seen before the U.S.-Israeli conflict with Iran. Shipping operators in Asia and Europe warned that restoring the confidence necessary to resume transit through Hormuz could take weeks.
Against this backdrop, investors will be watching the G7 meeting, where European leaders are expected to convey their reservations to Trump regarding the Iran deal and the broader strategy for Ukraine.
Although the pact reduces inflationary risks, fears persist that the high cost of crude in recent months has already permeated global economies, potentially forcing central banks to act to contain prices. In this vein, investors digested the widely expected rate hike by the Bank of Japan, which brought borrowing costs to a 31-year high. Attention now shifts to the Federal Reserve meeting, with the policy statement scheduled for release on Wednesday at 1800 GMT.
'Today's session could be characterized by a consolidation of levels following the strong gains accumulated in recent days,' Bankinter analysts noted in their morning briefing.
'The market is in a holding pattern ahead of the week's main event: the Fed meeting, the first chaired by Kevin Warsh. Additionally, we will be monitoring the final details of the U.S.-Iran agreement and the evolution of oil prices (opening down 0.5% today), given their direct impact on inflation expectations and, consequently, central bank decisions,' they added.
After surpassing 19,000 points for the first time in history on Monday, the Spanish benchmark IBEX 35 was up 53.30 points, or 0.28%, at 19,085.30 points by 0703 GMT on Tuesday. Meanwhile, the FTSE Eurofirst 300 index of leading European shares advanced 0.23%.
In the banking sector, Santander rose 0.09%, BBVA gained 1.36%, Caixabank advanced 0.66%, Sabadell climbed 0.23%, Bankinter shed 0.38%, and Unicaja Banco rose 0.66%.
Among large-cap non-financial stocks, Telefonica gained 0.24%, Inditex slipped 0.14%, Iberdrola appreciated 0.44%, Cellnex remained unchanged, and the oil major Repsol lost 0.28%.
(Reporting by Tomas Cobos: editing by Benjamin Mejias Valencia)
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