Markets amid fragile truces, high interest rates, and the Italian banking game of risk

Oil relief is no longer enough

The start of the week on financial markets told a less linear story than it might seem at first glance. Usually, when oil prices fall sharply, investors interpret the move as a relief: less pressure on energy costs, less imported inflation, more room for central banks. This time, however, the decline in crude oil wasn't enough to sustain risk appetite. Brent crude fell to $89.95 a barrel and WTI to $86.35 , a decline of around 5% . However, global stock markets struggled, as the market is no longer looking solely at energy prices: it's looking at the more delicate combination of slowing growth and remaining high interest rates.

In the United States, during the session, the S&P 500 lost around 0.47% , the Nasdaq around 1.21% , while the Dow Jones was little changed, around -0.08% . In Europe, the STOXX 600 closed down 0.5% at 618.64 points , with selling concentrated mainly in energy, raw materials, and technology. This is a sign that the market is no longer automatically celebrating the decline in oil prices, fearing that a slowdown in the global economy is also behind the decline.

Persian Gulf: Escalation and Temporary Truces

The weekend left a geopolitical landscape still volatile. The United States struck Iranian radar sites in Goruk and on Qeshm Island after launching drones toward the Strait of Hormuz. Tensions then escalated further with the downing of a US Apache helicopter near the Strait, reviving the threat of a renewed American military response.

At the same time, Iran and Israel have signaled a temporary suspension of direct attacks. Tehran has declared its operations against Israel concluded, but has maintained the threat of renewed attacks if necessary for defense. This truce is more tactical than strategic: useful for lowering oil prices, but not sufficient to truly reduce the geopolitical risk premium.

Complicating the situation, Israel has struck again in Lebanon, particularly in the Tyre area, with at least eight deaths and over 30 injuries, according to available reports. Iran's response, even if only verbal, confirms that the conflict remains regional, not isolated. For the markets, this means one thing: volatility may ease for a few sessions, but it won't disappear.

Rates: the real focus of the week

The key to the session was interest rates. The two-year U.S. Treasury yield was around 4.155% , while the 10-year yield was close to 4.551% : levels virtually unchanged, but high enough to continue to weigh on equity valuations. In Europe, the 10-year German Bund was trading around 3.05% , while the 10-year Italian BTP was near 3.82% .

The point isn't just that rates haven't dropped. The point is that the market is beginning to fear a phase in which the economy loses momentum, but central banks aren't yet in a position to cut rates. In the United States, expectations of a possible rate hike by the end of the year have increased following continued solid job data and perceived persistent inflation. This explains why gold, despite a geopolitically tense environment, has fallen: the precious metal offers no yield, and when real rates remain high, it loses some of its appeal. Spot gold slipped to $4,264.70 an ounce, down about 1.5% , while silver lost over 4% .

Real Economy: Germany and China Send Mixed Signals

On the macroeconomic front, the news was less negative. German industrial production grew by 0.4% in April, the first positive sign after a difficult few months, although the figure remains fragile and short of a true recovery cycle. German exports rose by 0.9% , while the trade surplus stood at around 14.5 billion euros .

The signal from China is even stronger: exports in May grew 19.4% year-on-year, imports 27.4% , with a trade surplus of around $105.43 billion . These are significant numbers, supported by technology, semiconductors, electric cars, and anticipated business demand. But here too, the market is seeing two sides to the story: on the one hand, China continues to export industrial strength; on the other, part of this growth could be due to anticipated orders and not structurally stronger global demand.

Italy: Record-high FTSE MIB and new banking risk

In Italy, the FTSE MIB remains one of the key players in 2026. The index reached 51,240 points , new all-time highs, confirming the relative strength of the Milan stock exchange compared to other European markets. The banking sector remains the main driver, supported by high profitability, rates still favorable to margins, and extraordinary transactions.

The most significant news is Intesa Sanpaolo's takeover bid for Monte dei Paschi di Siena: a €30.6 billion transaction, with a 12.5% premium over the previous closing price and a cash-plus-equity component. The plan also includes the sale of 635 MPS branches to Unipol/BPER to reduce antitrust risks. If completed, the transaction would reshape the Italian and European banking landscape, further strengthening Intesa's systemic role.

AI and the Stock Market: OpenAI Prepares for Public Goal

On the technology front, OpenAI has reportedly begun the process of listing in the United States. This is symbolic news: artificial intelligence, until now the narrative and financial driving force of the markets, is entering a more mature phase, where expectations must weigh against earnings, governance, margins, and multiples. It's no coincidence that the Nasdaq has been among the weakest indexes: the market isn't abandoning AI, but it's becoming more selective.

The summary: less oil, but more caution

The lesson from this week is clear: the decline in oil prices helps, but it doesn't solve everything. Investors fear that the decline in crude oil reflects not only a geopolitical truce, but also a possible slowdown in demand. Combine this with high interest rates, still cautious central banks, and stretched stock valuations, and the result is a more nervous market.

At this stage, the key word isn't panic, but selection. Stock markets remain near their highs in several countries, including Italy, but support is no longer uniform. Those with visible profits, solid balance sheets, and pricing power win. Otherwise, the market seems to be telling a simple story: even when oil prices fall, if interest rates remain high and growth slows, the relief may be shorter-lived than expected.