French President Emmanuel Macron’s re-election victory Sunday should see financial markets “breathe a collective sigh of relief,” but Russia’s invasion of Ukraine has not erased concerns in Europe, said Seema Shah, chief strategist with Principal Global Investors.

Having Mr. Macron serve another term “is good news for the euro, French bond spreads and the share prices of French banks, (but) it is hard to see much upside for these assets in the near term given the broader macro outlook in the wake of the war in Ukraine,” Ms. Shah said in an emailed statement. “We think the probability of Europe ending this year in recession is high — and Macron’s victory doesn’t change this.”

With Mr. Macron representing the status quo, BlackRock Investment Institute said in a post-election note, “we could see yields on French government bonds edging down versus German bunds and French stocks ticking up. Peripheral European bonds like Italy’s and Spain’s as well as the euro could post modest gains on the prospect for deeper European integration.”

Mr. Macron, the first French president to be re-elected in 20 years is “committed to deepening EU integration” and has pushed for more flexible European fiscal rules and more common European Union investment funds, BlackRock Investment Institute said.

His re-election with 58.5% of the vote “is overall quite positive,” said Lale Akoner, senior market strategist at BNY Mellon Investment Management.

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