Israel launched strikes against targets in Iran on Monday - the first since a ceasefire began on April 8 - in response to Iranian attacks on Sunday. Iran's Revolutionary Guard blamed the United States for the latest escalation. In retaliation, they claimed to have fired missiles at the Israeli city of Haifa. 'As a result, all fears regarding persistent inflation are back in the market, hitting investors who must now decide whether to take some risk off the table before the summer break,' summarized Andreas Lipkow, chief analyst at broker CMC Markets.
RATE FEARS PUSH GOLD TO SIX-MONTH LOW
Concerns that oil shipments through the Strait of Hormuz will remain restricted for longer drove prices for North Sea Brent and US light crude WTI up by around four percent each, to 96.68 and 94.50 dollars per barrel (159 liters). Despite the supply crisis, the Opec+ oil cartel agreed on Sunday to the fourth increase in its production target in four months. However, analysts believe the decision will have little impact, as most Opec+ members are unable to meet their targets anyway due to the closure of the strait.
Meanwhile, mounting interest rate fears put significant pressure on gold prices. The precious metal fell by nearly one percent to around 4,293 dollars per troy ounce, reaching its lowest level in almost six months. Investors fear that Middle East tensions will further fuel energy prices and thus inflation, which could prompt the US Federal Reserve to raise interest rates. 'Gold could next test the psychologically important 4,000 dollar mark if this week's US inflation report comes in higher than expected,' warned Han Tan, chief analyst at trading platform Bybit. When interest rates rise, investors increasingly shift into interest-bearing assets, dampening demand for precious metals.
BIDDING WAR BOOSTS MONTE DEI PASCHI
At the same time, poorly received figures from US chip giant Broadcom had already halted the weeks-long technology rally on Thursday. Investors are now awaiting the IPO of billionaire Elon Musk's aerospace company SpaceX, scheduled for Friday. This could attract significant capital flows and once again prompt investors to question highly valued growth stocks, warned Timo Emden of research firm Emden Research.
Investors also offloaded aviation stocks. Shares in Air France, Wizz Air, IAG, and Lufthansa fell between 1.5 and nearly three percent. The global aviation industry has almost halved its profit forecast for 2026 due to the Middle East conflict. The association cited increased fuel costs and disrupted flight corridors as the primary reasons.
On the Milan stock exchange, the prospect of a bidding war boosted shares in the Italian bank Monte dei Paschi di Siena (MPS). Shares in the Tuscan institution surged by twelve percent. Larger rival Banco BPM announced on Sunday that it would invite MPS to merger talks. Simultaneously, Intesa Sanpaolo has already announced a 30.6 billion euro bid for all MPS shares. According to insiders, other competitors such as BPER Banca are also considering an offer for the traditional bank, which was once rescued by the state.
On the Frankfurt Stock Exchange, Airbus came under pressure with a price drop of up to 3.5 percent. According to a report by the Bloomberg news agency, the aircraft manufacturer has informed some customers of delays for A320neo family aircraft scheduled for delivery in 2027 and 2028.
(Report by Sanne Schimanski, edited by Christian Götz. For inquiries, please contact our editorial office at berlin.newsroom@thomsonreuters.com (for politics and economics) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)
