European Stocks Close Lower as U.S.-Iran Ceasefire Hopes Fade

European equities ended Monday’s session in the red as fading hopes for a U.S.-Iran ceasefire dampened risk appetite. The pan-European Stoxx 600 index fell 0.8% to close at 520.50, reversing earlier gains that had been fueled by initial optimism over potential de-escalation talks held in Geneva over the weekend. Losses were broad-based. Germany’s DAX dropped 1.1%, leading regional decliners, while France’s CAC 40 slipped 0.6% and the U.K.’s FTSE 100 edged 0.3% lower. The sell-off accelerated after reports confirmed that negotiations had stalled, raising fears of renewed instability in the Middle East. Brent crude futures settled 1.2% higher at $78.40 a barrel, reflecting heightened supply risk premiums. “Investors are pivoting to defensive positions as the geopolitical premium returns to markets,” a senior strategist noted. The slide wiped out morning gains that had followed the U.S. Memorial Day holiday weekend.