European Stocks Flat as Oil Prices Rise, US CPI in Focus

European stocks were little changed on Monday, holding close to record highs as rising crude oil prices and continued uncertainty over Middle East shipping routes offset optimism following last week’s strong market rally.

The pan-European Stoxx Europe 600 Index traded flat after posting its strongest weekly performance since late June. Germany’s DAX, France’s CAC 40 and the UK’s FTSE 100 also remained broadly unchanged as investors balanced geopolitical risks against a more supportive global economic outlook.

Sentiment improved after Friday’s weaker-than-expected U.S. employment report showed the economy lost 23,000 jobs in July. The surprise contraction reduced expectations for further Federal Reserve policy tightening and increased attention on the outlook for interest rates.

Oil prices remained a key concern for European markets. Brent crude climbed around 0.6% to approximately $84.04 per barrel, raising the prospect of higher input costs for manufacturers and other energy-intensive industries.

Investors also monitored developments surrounding the Strait of Hormuz. Iranian officials said a draft agreement with Oman outlining new shipping channels was nearing completion. However, Tehran indicated that the strategic waterway would not fully reopen until additional U.S. conditions were met, keeping geopolitical risk premiums elevated across oil and freight markets.

Volkswagen shares were in focus after the Porsche and Piëch families increased pressure on stakeholders to support management’s restructuring strategy. The backing from Porsche SE could pave the way for deeper cost reductions, potentially including significant additional job cuts across Volkswagen’s European operations as the automaker confronts high production costs, tariffs and growing competition from Chinese electric vehicle manufacturers.

European technology stocks were cautious ahead of earnings from U.S. companies Cisco Systems, Applied Materials and CoreWeave, with investors looking for evidence that artificial intelligence spending remains strong.

Markets are now turning toward Wednesday’s U.S. Consumer Price Index report for further clues on inflation and monetary policy.

Among individual European stocks, Hypoport gained 3% following an earnings update, while Stabilus dropped 5% after a request to terminate its CFO’s contract. Vistry fell 9% following a Financial Times report that Allianz was reducing insurance cover extended to the housebuilder’s suppliers.