European stock markets posted solid gains on Monday, with the German DAX rising 1.3% to close at 24,956 points.
The rally was driven by a reported framework agreement between the United States and Iran, signaling a potential end to the ongoing conflict and easing immediate geopolitical risk premiums across global asset classes.
The relief in equity markets reflects a sharp repricing of war-risk discounts that had weighed on European industrial and financial stocks.
Investors are rotating out of defensive havens and back into cyclical sectors, betting that the diplomatic breakthrough will stabilize energy supply chains and reduce the cost of capital for risk-sensitive businesses.
The development marks a significant pivot from the previous week, when the war had derailed broader economic growth narratives.
While the agreement brings immediate market relief, the underlying economic damage from the conflict remains a concern.