Market Rebounds as U.S. Signals Middle East Conflict Resolution

Futures tracking major European stock indexes soared over 2% on Wednesday following remarks from U.S. President Donald Trump hinting at a potential resolution to the protracted conflict in the Middle East, offering investors a sense of relief.

The pan-European STOXX 600 index climbed 2.78% at 0643 GMT, with Germany's DAX and France's CAC 40 indexes also seeing rises of 2.7% and 2%, respectively. Investor sentiment brightened globally after Trump's statement that the end of hostilities with Iran might be near, coupled with Washington's signals of possible engagement in direct talks with Tehran. This hints at a de-escalation of the conflict even without a formal agreement.

Trump assured reporters, stating, "We'll be leaving very soon," suggesting a possible resolution within two to three weeks. This backdrop saw energy prices retreat by 3%, with Brent crude oil futures now stabilizing around $100 a barrel. In recent weeks, European stocks have been under pressure due to heightened dependency on oil from the now-restricted Strait of Hormuz, causing the STOXX index to plunge over 10% from earlier highs, concluding the month with the steepest losses since June 2022. Attention is also drawn to sportswear companies like Adidas and Puma, following discouraging projections from U.S.-based Nike.