SYDNEY/LONDON - European stocks and U.S. futures fell slightly while oil prices dipped on Monday after Iranian negotiators said progress had been made in peace talks with the United States, helping calm fears the fragile process to end the Iran war was breaking down.

UK assets were steady after Prime Minister Sir Keir Starmer announced his resignation, paving the way for the seventh leader in 10 years.

The Iran war talks had earlier been overshadowed by Tehran's announcement it had again closed the Strait of Hormuz, with shipping having slowed after U.S. Central Command said 55 vessels passed on Saturday, prompting U.S. President Donald Trump to threaten fresh attacks.

But officials from Qatar and Pakistan released a statement saying the first session of talks had concluded and progress was made on a roadmap to reach a final deal in 60 days.

The apparent progress in discussions saw Brent crude futures shed early gains to ease 0.7% to $80.07 a barrel, far below its May peak of $126.41.

Europe's STOXX 600 index wavered and was last down 0.1%, while U.S. S&P 500 futures pared early losses to also trade 0.1% lower.

"There does appear to be further progress being made during talks in Switzerland towards a lasting settlement, and oil prices have dipped again," said Susannah Streeter, chief investment strategist at Wealth Club.

"It is clear there is still a long way to go, and more obstacles may emerge before a long-term deal is signed."

Asian stocks climbed overnight, supported by the apparent progress in peace talks. Japan's Nikkei rose 1.6%, while South Korea's red-hot market added 0.7%, after surging more than 11% last week on demand for semiconductor stocks.

STARMER RESIGNATION CLOUDS UK OUTLOOK

The pound was down 0.1% to $1.322 on Monday after Starmer announced his resignation, which had been widely rumoured over the weekend.

Former Manchester Mayor Andy Burnham is the favourite to succeed Starmer, and analysts said a key question for nervy UK bond markets would be who becomes finance minister.

"A new leader does not fundamentally alter the difficult fiscal situation they're going to inherit," said Nick Rees, head of macro research at Monex Europe.

"It's what did for Starmer, and we are yet to see any credible plan as to how this will be dealt with."

The euro eased 0.1% to $1.146, after hitting a three-month low on Friday at $1.1418.

Treasuries remained under pressure following a hawkish turn by the Federal Reserve last week that led markets to price in a 75% chance of a rate hike as early as September.

Futures imply around 38 basis points of tightening by year-end, while yields on 2-year notes rose as much as 4 basis points to the highest since early 2025 at 4.230%.

"Our baseline call is for patience and a first hike in the second half of 2027, but (we) believe the margin for error and the tolerance for further inflation is limited, with genuine risks of earlier hikes," said Fabio Bassi, head of cross-asset strategy at JPMorgan.

The Fed's hawkish outlook helped push the dollar up 0.3% to 161.71 yen, with only the threat of Japanese intervention preventing the currency rising to 2024's 40-year high of 161.96.

(Reporting by Wayne Cole in Sydney and Harry Robertson in London; Editing by Shri Navaratnam, Kate Mayberry, Aidan Lewis)

A visitor stands next to an electronic screen displaying Japan's Nikkei stock prices quotation board inside a conference hall in Tokyo, Japan March 4, 2026. REUTERS/Issei Kato Issei Kato Reuters

Copyright Reuters or USA Today Network via Reuters Connect.

This story was originally published June 22, 2026 at 5:32 AM.

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