European stocks jumped to one-month highs on Wednesday after the US agreed a temporary ceasefire with Iran, easing fears of widespread attacks previously threatened by Washington. The Eurozone’s STOXX 50 climbed 4.6% to 5,693, while the pan-European STOXX 600 advanced 3.7% to 612. The two-week agreement signaled that tanker traffic through the Strait of Hormuz, a key shipping chokepoint, is set to resume.
However, ongoing attacks against GCC members and still-muted vessel traffic through the Strait tempered hopes for a definitive end to hostilities. Reduced concerns over a major energy shock drove sharp declines in European oil and natural gas benchmarks, putting downward pressure on bond yields. The resulting improvement in the credit outlook boosted bank shares, with Santander, UniCredit, and BNP Paribas each rising by nearly 8%. Risk-on sentiment also supported speculative AI-related positions, lifting ASML and Infineon by around 10% apiece. In addition, lower gas prices improved profit margins for industrials, helping Siemens, Safran, and Schneider rally more than 10%.
