European Stocks Stage Sharp Rebound on Signals of Ending Iran War
The pan-continental Stoxx Europe 600 climbed 2.5%, closing at 597.69 — partially recovering from its steepest monthly decline since 2022.
Gains were broad and decisive across the continent. Germany's DAX led major indexes with a 2.73% advance to 23,298.89, while Spain's IBEX and Italy's FTSE MIB surged 3.11% and 3.17%, settling at 17,580.4 and 45,714.95, respectively. France's CAC 40 added 2.1% to close at 7,981.27, and Britain's FTSE 100 rose 1.85% to 10,364.79. The euro strengthened alongside equities, with the euro/dollar rate gaining 0.44% to reach 1.1604 as of 1740 GMT.
The catalyst was unmistakable. Speaking Tuesday, Trump stated that U.S. military operations in Iran could wrap up within "two or three weeks," adding that Washington would depart "pretty quickly" once its stated objectives were achieved. He further indicated a resolution could materialize even without a formal agreement with Tehran — a remark markets read as opening the door to an earlier-than-expected end to hostilities.
Energy markets reflected the recalibrated risk outlook. Brent crude retreated to approximately $100.90 per barrel, while U.S. West Texas Intermediate slipped to around $99.85, as Trump's comments stripped away a portion of the geopolitical risk premium that had been embedded in oil prices in recent weeks. That pullback weighed on energy shares, making oil and gas the sole sector to finish in the red.
The broader market rotation, however, powerfully rewarded sectors hardest hit by the conflict. Travel and aviation stocks surged, with Air France and Lufthansa each climbing more than 8%. The Stoxx defense index jumped 5.9%, and European bank stocks gained 4.5%, reflecting renewed confidence in economic stability.
On the corporate front, Danish wind turbine manufacturer Vestas announced new contract wins in both the U.K. and the U.S., offering a modest lift to clean energy sentiment on an otherwise geopolitics-driven session.
Separately, official data showed the eurozone unemployment rate ticked up slightly to 6.2% in February, though the figure drew limited market attention amid the day's dominant macro narrative.
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