Global geopolitical tensions and peace efforts

What happened: Over the weekend, Israel launched its deadliest airstrikes on southern Lebanon since the June ceasefire, threatening a return to war. Meanwhile, shipping traffic through the Strait of Hormuz slowed to a halt ahead of the U.S.-Iran ceasefire expiry on Monday, with no official negotiations or deal in sight. Despite these tensions, European stocks were set to open broadly higher on Monday, buoyed by U.S. President Donald Trump's delay of tariffs on European goods.

Market impact: Geopolitical tensions in the Middle East could disrupt energy supply chains, impacting oil and gas companies. The slowdown in shipping through the Strait of Hormuz may affect energy prices and companies with exposure to the region. Conversely, the delayed U.S. tariffs on European goods could boost European equities, particularly in sectors sensitive to trade tensions like autos and industrials.

What to watch next: Investors should monitor the U.S.-Iran ceasefire expiry on Monday for any escalations or de-escalations in tensions. Additionally, Israeli-Lebanese relations will be closely watched for further military actions or diplomatic efforts. Lastly, U.S. markets will reopen after the Memorial Day holiday, potentially bringing more clarity to global markets' reaction to these geopolitical developments.