By midday, the CAC 40 is up 0.95% at 8,430.20 points, nearing its pre-conflict levels. Before the start of strikes in the Middle East on Friday, February 27, the Paris market stood at 8,580.75 points. This trend is logically mirrored across other European markets: the DAX 40 in Frankfurt is climbing 1.12%, while the FTSE 100 in London remains more cautious, trading near break-even.

Investors are welcoming the agreement, which is expected to be signed next Friday and will allow for the reopening of the Strait of Hormuz on the same date. According to Donald Trump: 'With the opening of the Strait upon the signing of the agreement Friday, in view of the lifting of measures concerning me, oil will flow both ways again for the region and for the entire world!'. For its part, Iran indicated via the Fars News Agency late this morning that it will allow free passage through the Strait of Hormuz for 60 days as part of the deal.

However, some market participants remain concerned that the full text has not been disclosed, which could lead to points of friction between the parties, particularly regarding nuclear issues.

Regardless, crude oil prices are logically retreating. WTI in New York is down 1.08% at $80.05, while North Sea Brent has shed 1.15% to $82.77. Crude prices have thus returned to levels seen on March 5, just days after the conflict began.

This decline is weighing on sector stocks: TotalEnergies is stumbling by 5.16%, marking the steepest decline on the CAC 40. Conversely, the drop benefits airline groups, such as Air France-KLM (+3.96%).

The retreat in oil prices should also allow government bond yields to ease. In the longer term, it could relieve some pressure on major central banks. Last week, the ECB raised its key interest rates by 25 basis points due to rising inflation linked to energy price hikes, a direct consequence of the Middle East conflict.

On the currency market, the euro is nearly flat against the greenback (+0.06%), trading at $1.1610.

Macroeconomic and Corporate News

Regarding economic data, Eurozone industrial production was slightly disappointing. In April, it grew by only 0.1%, missing expectations of +0.2%. However, March data was revised upward from +0.2% to +0.4%.

In another disappointment for the Eurozone, the trade balance posted a deficit of €1bn in April, while analysts had projected a surplus of €7.8bn. The March figure was revised down from +€7.8bn to +€4.9bn.

This afternoon, investors will look to U.S. industrial production data for May.

The most critical event of the week is scheduled for Wednesday evening with the Federal Reserve's monetary policy decision.

In corporate news outside of the peace deal, Saint-Gobain is seeing significant interest (+4.86%) after announcing the sale of Dahl to Kesko for €1.2bn.

Schneider Electric is also a top performer (+2.85%). The group unveiled a partnership with Taiwan's Foxconn to define and deploy the next generation of AI-based data centers at scale.