As Trump Considers Ending Middle East War, Stocks Rise – Europe Market Wrap
Stocks soared, while oil fluctuated between gains and losses after the Wall Street Journal reported that Trump had indicated his willingness to terminate the US military campaign against Iran.
S&P 500 futures rose 0.8%, regaining ground following a selloff that put the benchmark on track for its worst month since 2022. Brent traded around $108 per barrel. Treasuries extended their rally, with the 10-year yield falling 2 bps to 4.33%. The Dollar remained unchanged, while gold saw a modest gain.
The month-long conflict in the Middle East has roiled markets, with Iran responding to US and Israeli attacks with a near-total blockage of the Strait of Hormuz, a critical transit route for roughly a fifth of world crude supply. Brent has risen nearly 50% as a result of the disruption, raising concerns of an inflationary spiral, with US petrol prices exceeding $4 per gallon for the first time since 2022.
Economic figures are beginning to indicate the impact of the Iran war on prices. The Eurozone experienced its sharpest increase in inflation since 2022, as the Iran war drove up energy costs, confirming concerns that the ECB will have to hike interest rates.
Consumer prices increased 2.5% from a year ago in March, up from 1.9% the previous month and the highest level since January 2025. Markets are pricing in up to three quarter-point increases in the ECB’s deposit rate this year, from its current level of 2%.
