TLDR
- Trump declared the Iran ceasefire Memorandum of Understanding “over” at the NATO summit in Ankara
- European stocks fell sharply, with Germany’s DAX dropping 2.4% and France’s CAC 40 down 2.2%
- Brent crude surged over 5%, with traders pricing in the risk of a Strait of Hormuz blockade
- Oil majors BP and Shell rose as energy stocks outperformed the broader market
- Markets are watching the Federal Reserve’s June meeting minutes under new Chair Kevin Warsh
European stock markets fell sharply on Wednesday after U.S. President Donald Trump declared the Iran ceasefire deal “over” during the NATO summit in Ankara, Turkey.
The pan-European STOXX 600 index swung from a modest 0.4% decline at midday to a 1.7% drop after Trump’s comments went public.
Germany’s DAX fell 2.4%. France’s CAC 40 lost 2.2%. London’s FTSE 100 and Italy’s FTSE MIB each declined more than 1.5%.
Trump was responding to questions about the Islamabad Memorandum of Understanding, a fragile 60-day ceasefire extension agreed in June between the U.S. and Iran.
“We make a deal, and everyone’s agreed. No nuclear weapons. We make a deal. They go outside, talk to the press, they say we never even talked about it. There’s something wrong with them. They’re cuckoo. As far as I’m concerned, it’s over,” Trump said.
The MoU had provided a temporary safety net for global markets, including a toll-free shipping window through the Strait of Hormuz. Its collapse raises the risk of a return to a maritime blockade on one of the world’s most critical oil shipping routes.
BREAKING 🚨 U.S. President Trump says ceasefire with Iran is “over.” pic.twitter.com/8i8WztKwCX
— Insider Paper (@TheInsiderPaper) July 8, 2026
Oil Prices Spike on Geopolitical Risk
Brent crude futures, which had already been up around 2% earlier in the session, surged to a 5.4% gain after Trump’s remarks. Traders moved quickly to price in the possibility of a major supply disruption.
Washington also revoked a key waiver that had allowed Iran to export crude oil, pushing prices higher.
Energy stocks bucked the broader market trend. BP rose 3.3% and Shell gained 1.9%, making them among the top performers in European markets on the day.
Rising oil prices are stoking concerns that inflation could stay elevated for longer, which in turn could push back expectations for interest rate cuts in Europe.
Fed Minutes Add to Market Uncertainty
Markets are watching closely for the release of Federal Reserve minutes from the June meeting, the first under new Chair Kevin Warsh.
Warsh has signaled a preference for less forward guidance compared to his predecessors, making investors uncertain about where policy is headed.
Nearly half of Fed policymakers at the last meeting indicated they were open to further rate hikes if inflation stays stubborn. A hawkish tone in the minutes could prompt a repricing of global rate expectations.
European government bond yields rose on the day, reflecting reduced appetite for risk assets.
The combination of geopolitical tension in the Middle East and uncertainty around U.S. monetary policy pushed investors into defensive positions.
Oil prices closing near session highs were the clearest signal of just how quickly the market mood shifted after Trump’s remarks.
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