European equity markets opened higher on Monday, led by the German DAX, as investors reacted to a reported pause in US military strikes against Iran.
The development marks a significant de-escalation in the ongoing conflict, allowing traders to unwind hedging positions that had weighed on global indices throughout the previous week.
The DAX is attempting to build on Friday’s gains, with sentiment shifting sharply from defensive to risk-on as the immediate threat of supply chain disruption receded.
US stock markets also opened higher, continuing the momentum from Tuesday’s session where equities rebounded after several days of declines.
The broader market recovery reflects a dual driver: easing geopolitical tensions in the Middle East and underlying strength in corporate earnings.
With the immediate military threat abated, capital is flowing back into cyclical sectors and growth stocks that had been sold off during the height of the crisis.