European Stocks Surge 4% on U.S.-Iran Ceasefire Deal as Travel Shares Jump

European markets rallied strongly on Wednesday, with stocks surging nearly 4% after news of a conditional ceasefire agreement between the United States and Iran lifted global investor sentiment. The pan-European Stoxx 600 index climbed 3.8% shortly after the opening bell, as traders reacted positively to easing geopolitical tensions that had previously rattled financial markets.

Investor optimism was widespread, with almost all sectors trading higher except oil and gas. Travel stocks led the rally, jumping 7.3%, followed by autos and mining stocks, which both gained 5.8%. Major regional indices also posted significant gains, as the U.K.’s FTSE 100 rose 2.4%, Germany’s DAX surged 4.8%, France’s CAC 40 climbed 4.1%, and Italy’s FTSE MIB advanced 3.6%.

Individual companies mirrored the upbeat mood, with firms like Angofagasta, Lufthansa, and EasyJet recording double-digit gains in early trading. The strong performance in travel-related stocks reflects renewed confidence in global mobility and economic activity, which had been threatened by escalating tensions in the Middle East.

The ceasefire announcement also triggered a sharp drop in oil prices, which fell below $100 per barrel after U.S. President Donald Trump confirmed a pause in planned attacks on Iranian infrastructure. The agreement is conditional on Iran reopening the Strait of Hormuz, a critical global oil shipping route. In response, Iran signaled a willingness to halt defensive operations, raising hopes of a temporary de-escalation.

Despite the positive market reaction, uncertainty remains as reports of missile and drone activity persist in parts of the Middle East. Investors are also watching key economic data releases, including German factory orders and EU retail sales, for further clues on the region’s economic outlook amid ongoing geopolitical risks.

source: cnbc