European Markets Climb Amid Middle East Tensions: Stocks Rebound After Volatile Trading

European stocks opened higher on Wednesday as investors monitored escalating tensions in the Middle East. The Stoxx Europe 600 rose 1.2% by mid-morning London time, while London’s FTSE 100 gained 0.4%. Germany’s DAX surged 1.5%, and France’s CAC 40 climbed nearly 1%, reflecting cautious optimism despite ongoing geopolitical risks.

Spain’s IBEX 35 recorded a 1.5% rise following a warning from U.S. President Donald Trump, who threatened to cut off trade with Spain over its refusal to allow U.S. forces to use its bases for strikes on Iran. Spanish Prime Minister Pedro Sanchez criticized the attacks, comparing them to the Iraq invasion and calling them a “disaster” for regional stability.

Markets had experienced sharp declines on Tuesday, weighed down by fears of a wider conflict. Banking, insurance, travel, leisure, and utilities stocks were particularly affected, highlighting investor sensitivity to geopolitical instability. Overnight attacks by U.S. and Israeli forces on Iran continued to drive market sentiment as countries coordinated evacuation flights for citizens in the region.

Oil prices eased slightly after President Trump announced U.S. insurance coverage for tankers in the Persian Gulf and the possibility of naval escorts to secure shipping lanes through the Strait of Hormuz. This move aimed to stabilize maritime traffic and ease energy market concerns, which had been fueling volatility in global markets.

In the Asia-Pacific region, markets faced turbulence overnight. South Korea’s Kospi fell over 12% before recovering some losses, and U.S. stock futures reflected ongoing uncertainty. Meanwhile, the United Arab Emirates reopened its markets after a two-day closure caused by Iranian drone and missile strikes, with Dubai and Abu Dhabi listings falling sharply once trading resumed.

source: cnbc