While sentiment was dampened yesterday by the resumption of hostilities between Iran and Israel, a period of calm has now set in. Investors are encouraged by comments from Donald Trump, who indicated that U.S. diplomacy is making 'final efforts' toward concluding a peace agreement with the Islamic Republic.

According to Loïc Bécue at Sienna IM: 'After more than a month of truce between the two belligerents, uncertainty prevails regarding the agreement between Iran and the United States. Points of contention, such as the nuclear issue and control of the Strait of Hormuz, remain stumbling blocks. However, both parties appear to be gradually moving toward a deal.'

The ceasefire remains fragile, however, as the Israeli army has ordered residents of the city of Tyre, Lebanon, to evacuate, likely in anticipation of fresh strikes.

Regardless, oil prices are currently trending lower. In New York, WTI is down 2.62% at 88.88 dollars, while in London, North Sea Brent is retreating 2.15% to 92.11 dollars.

The decline in crude prices is supporting financial markets, which are also cheering the rebound seen in the semiconductor sector last night on Wall Street and in Asia this morning. South Korea's benchmark Kospi index surged 8.18%, driven primarily by Samsung Electronics (+8.97%) and SK Hynix (+15.91%). These two companies alone account for between 45% and 50% of the total index.

On the currency market, the euro is rising against the greenback (+0.24%) and is trading at 1.1556 dollars.

Macroeconomic News

On the macroeconomic front, Germany released generally mixed indicators. Its trade surplus reached 14.5 billion euros in April, falling short of the 15.4 billion euros expected by analysts. Conversely, the country's industrial production performed better than anticipated in April, rising by 0.9% against expectations of a 0.3% decline.

This afternoon in the United States, investors will digest the April trade balance and May existing home sales. The main event across the Atlantic is scheduled for Wednesday with the publication of inflation figures.
In Europe, Thursday will be the most significant day, featuring the European Central Bank's monetary policy decision. A 25-basis-point rate hike is anticipated by the majority of market participants.

Corporate News

In France, Valeo is advancing 2.23% after announcing a partnership with Calyos, which increases the likelihood of the group positioning itself in cooling systems, particularly for data centers.

Conversely, Trigano is shedding 3.71%. Oddo BHF maintained its outperform rating on the leisure vehicle and equipment specialist but lowered its price target from 205 to 191 euros.

Airbus (+0.58%) and Dassault Aviation (+0.13%) do not appear to be overly affected by the abandonment of the FCAS project, the European aircraft intended to replace the Rafale and the Eurofighter. However, Spain's Indra Sistemas is dropping 1.62%. The company was involved in the project, notably as national coordinator and lead for the sensor and combat cloud pillars.

Nestlé is gaining in Zurich (+0.89%), despite PAI Partners withdrawing from the process to acquire a 50% stake in Nestlé's water business. This decision jeopardizes the auction process, from which the Swiss food giant hopes to raise approximately 5.8 billion dollars.

In London, GSK is down 3.57% after announcing an agreement to acquire Nuvalent for 10.6 billion dollars, whereas rumors had suggested a figure of 9 billion dollars.