European stocks set to slump as Gulf tanker attacks threaten ceasefire

• European markets set to open down 0.34% to 1.1%, with Germany's DAX leading declines at -1.1%, following the weekend Gulf of Oman incident
• The U.S. has been operating a naval blockade of Iranian ports since last week, which Iran views as a ceasefire breach and cited as reason for pulling out of Monday's planned peace talks
• President Trump threatened to destroy all of Iran's power plants and bridges if Tehran does not agree to Washington's terms before the ceasefire expires this week

European Stocks Poised to Drop on Escalating U.S.-Iran Tensions

European markets are expected to open lower Monday following a weekend escalation in U.S.-Iran tensions that threatens to derail a fragile ceasefire between the two nations. The U.K.'s main index is projected to decline 0.34%, while Germany's DAX is set to fall 1.1%, and France's and Italy's benchmarks are both expected down 1%.

Key Developments:

President Trump announced Sunday that a U.S. guided missile destroyer fired on and disabled an Iranian-flagged vessel in the Gulf of Oman, with Marines subsequently seizing the ship. This action intensifies the ongoing U.S. naval blockade of the Strait of Hormuz, implemented last week to restrict ships entering and exiting Iranian ports.

Iran has characterized the blockade as a ceasefire breach and cited it as justification for withdrawing from expected negotiations scheduled for Monday in Islamabad. Trump threatened Sunday to "knock out every single Power Plant, and every single Bridge, in Iran" if Tehran refuses to accept Washington's terms. The current ceasefire is set to expire this week.

Market Impact:

The escalation comes after a strong week for Wall Street, with the S&P 500 and Nasdaq Composite reaching all-time highs following a separate ceasefire between Iran and Lebanon. However, Asian markets turned lower early Monday on the news.

The Strait of Hormuz, a critical global shipping lane, remains contested. Iran declared it reopened, but by Saturday vessel traffic was again restricted, with state media reporting U.S. interference.

No major European earnings or data releases are scheduled for Monday.