European Shares Set to Open Lower Amid Rising Oil Prices and Bond Yields

Market outlook for Monday

European equity markets are expected to open in the red, with the Paris CAC 40 projected to fall about 0.76 % at the opening bell. Futures contracts point to a 0.75 % decline for Germany’s DAX, a 0.50 % drop for the pan‑European STOXX 600, and near‑flat performance for the UK FTSE‑100 (-0.02 %).

Geopolitical backdrop

Uncertainty remains high after a drone strike sparked a fire near a nuclear plant in the United Arab Emirates on Sunday. Local authorities are still investigating the cause, and former President Donald Trump reiterated threats toward Tehran, while diplomatic efforts for a lasting peace remain stalled.

According to Axios, the U.S. president will convene his national‑security team on Tuesday to review options concerning Iran, a move that keeps energy markets tense after the Strait of Hormuz was blocked at the end of February.

Oil and bond market moves

Brent crude rose 1.57 % to $110.97 per barrel, and U.S. WTI advanced 1.93 % to $107.45. Prices have surged more than 7 % this week, while shipping through the Hormuz Strait remains severely limited.

The surge in energy prices revives inflation concerns and strengthens expectations that major central banks will maintain restrictive monetary policies, keeping global bond yields under pressure.

Key earnings to watch

Investors will closely monitor Nvidia’s upcoming quarterly results, which are seen as the next test for the artificial‑intelligence sector that has been the main driver of recent Wall Street outperformance despite the geopolitical headwinds.

Policy and coordination

G7 finance ministers are meeting in Paris on Monday and Tuesday to discuss global economic imbalances and coordination of critical‑mineral supplies.

Recent market performance

On Friday, Wall Street closed sharply lower as inflation worries and the Middle‑East conflict eclipsed AI optimism. The Dow Jones fell 1.07 %, the S&P 500 dropped 1.24 %, and the Nasdaq slipped 1.54 %.

In Asia, Japan’s Nikkei fell 0.74 % on higher global yields and geopolitical tension. China’s Shanghai Composite edged down 0.11 %, while the CSI 300 declined 0.55 % amid disappointing economic indicators.

Bond market snapshot

U.S. Treasury yields kept climbing, with the 10‑year note reaching 4.6272 % after a 23‑basis‑point jump last week. The two‑year yield hit 4.1029 %.

In Japan, bond yields rose to their highest level since 1996, prompting the government to consider a supplemental budget to cushion the economic impact of the Iran conflict.

Currency markets

The dollar gained modest ground against a basket of major currencies, supported by ongoing geopolitical and inflationary concerns.