European equity markets finished Monday on a modest rise, trimming the earlier surge that had followed an interim U.S.–Iran accord aimed at reopening the Strait of Hormuz. Investors had chased gains after the diplomatic breakthrough, but the day’s close showed a cautious pullback as traders assessed the durability of the deal and its impact on energy supplies.

The Strait of Hormuz channels roughly 20% of global oil traffic, so any disruption can tighten supply curves and lift prices. Although the agreement was temporary, market participants weighed its potential to stabilize tanker routes and reduce geopolitical risk for oil producers. The resulting optimism pushed major indices higher before settling near their record highs.

European stocks, however, capped gains as the market reassessed the deal’s longevity. Energy‑heavy sectors, which had benefited from the initial rally, softened when the settlement’s temporary nature became apparent. The European Central Bank’s stance on inflation and interest rates also factored into the day’s trading sentiment, keeping volatility in check.

By the close, the benchmark STOXX 600 slipped 0.2%, while the MSCI Europe index receded 0.1%. Analysts note that the day’s muted finish reflects a delicate balance between geopolitical relief and ongoing concerns about oil supply stability. Investors now await further clarification on the agreement’s duration and any long‑term enforcement mechanisms.