European shares rose on Tuesday after Washington's new Iran sanctions fell short of the punitive measures traders had braced for, with defence stocks leading the advance. The FTSE 100, Germany's DAX and France's CAC 40 all gained, while bitcoin's surge past $80,000 added to the risk-on mood even as U.S. officials kept military options on the table.
The pan-European STOXX 600 climbed 0.3% to 656.14 as of 0718 GMT on Tuesday. Defence stocks led sectoral gains, up 1%, as investors welcomed a softer-than-feared U.S. sanctions package against Iran.
Iran sanctions fall short of fears
On Monday, the Trump administration warned countries to cut business ties with Iran or face secondary sanctions, part of a campaign it billed in stark terms. The Treasury Department, however, stopped short of imposing any penalties. Iran promised to retaliate against the expanded sanctions and said it was confident major trading partners would resist Washington's pressure campaign.
Yet geopolitical risk stayed elevated, as U.S. War Secretary Pete Hegseth said Washington was not ruling out strikes on Iran. According to Investing.com: "if we need to use kinetic strikes, we'll use them", he told reporters, while stressing economic pressure remained the primary tool.
FTSE 100 gains as bitcoin extends its rally
The FTSE 100 rose 0.15% as of 03:25 ET (07:25 GMT), Germany's DAX gained 0.24% and France's CAC 40 added 0.26%. Sterling was little changed against the dollar, up 0.03% at $1.3640.
Bitcoin rose above $80,000 to a more than three-month high, last near $80,323, after touching $81,237.94 earlier in Asian hours. The cryptocurrency is up 28% in August, on track for its biggest monthly gain since November 2024, as a softer dollar in the wake of Treasury Secretary Scott Bessent's bond-buyback plans revived momentum in crypto markets.
Oil and gold slip as tensions persist
Oil prices fell further as traders saw little immediate threat to global crude supplies from the new measures. Brent crude slipped 0.72% to $89.89 a barrel, while WTI eased 0.74% to $89.91. Gold futures eased 0.016% to $4,697.36, with spot gold down 0.22% at $4,641.30.
Meanwhile, U.S. Treasury yields eased from recent peaks after reports the Treasury may use its cash reserves to fund larger debt buybacks, which could reduce the need for additional sales of short-term bills. The tech sector rose 0.3%, with investors awaiting Nvidia's results on Wednesday amid concerns the chipmaker may struggle to meet lofty expectations.
Sources: Investing.com, Investing.com
Trading involves risk.
Risk Disclaimer
