European Stocks Begin Week On Low Note
European stocks are likely to start the new trading week in negative territory, with investors keeping a close eye on geopolitical developments in Iran and growing pressure on Federal Reserve Chair Jerome Powell.
According to data from IG:
- UK’s FTSE 100 is expected to open slightly lower, down about 0.13%.
- Germany’s DAX is also predicted to dip 0.13%.
- France’s CAC 40 may open flat.
- Italy’s FTSE MIB could see a drop of 0.26%.
What’s Causing the Market Caution?
Tensions in Iran
Widespread protests in Iran have been met with a violent crackdown by the authorities. These events have raised global concerns and impacted investor confidence.
Reports suggest that U.S. President Donald Trump is reviewing several options in response to the crisis. These include possible military strikes, as well as economic and cyber actions that do not involve the military. Trump aides are expected to brief him on potential measures on Tuesday.
Pressure on Fed Chair Jerome Powell
In another development, the U.S. Department of Justice has opened a criminal investigation into Fed Chair Jerome Powell. The investigation is reportedly connected to his Senate Banking Committee for testimony about the renovation of Federal Reserve office buildings.
Powell stated that the investigation is part of an attempt to influence the central bank’s monetary policy, but he won’t give in to the pressure. His current term as Fed Chair is due to end in May 2026.
European Markets Overview
Investors in Europe are staying cautious as there are no major earnings reports or economic data releases scheduled for Monday. The markets are therefore largely reacting to global events, including geopolitical tensions and U.S. policy developments.
European investors are closely monitoring:
- FTSE 100 (UK)
- DAX (Germany)
- CAC 40 (France)
- FTSE MIB (Italy)
The combination of global political unrest and uncertainty in U.S. monetary policy is expected to keep European markets on edge at the start of the week.
