Ned Davis Research has raised its stance on European equities to overweight, noting the decline in energy prices as the United States and Iran move towards ending the conflict.

Strategist Mark Phillips stated that European stocks began to recapture some of their Iran-related underperformance in June, with investors currently pricing in the potential for a resolution to the conflict and a normalization of shipping through the Strait of Hormuz.

Phillips wrote in the report, "Improving global economic surprises and a more constructive outlook for the Eurozone economy are also supportive for equities."

The firm now holds a 5% overweight position in European equities (55%), a 5% underweight in fixed income (40%), and maintains a benchmark weight in cash (5%).