European Stocks Rebound

Stocks in Europe declined on Thursday, with the STOXX 50 falling 1.2% and the STOXX 600 dropping 1.9%, as hopes for a swift resolution to the conflict with Iran faded following comments from US President Trump. He stated that the US operation was nearing completion and pledged more aggressive actions, but his remarks offered little new detail, providing neither a clear timeline for withdrawal nor a concrete plan to reopen the Strait of Hormuz. As a result, oil prices surged, climbing back above $105 per barrel. All sectors were in negative territory except for energy, while technology and industrial stocks led the declines. Among the worst performers were ASML Holding (-4.1%), Infineon (-4.4%), Siemens Energy (-3.7%), and STMicroelectronics (-3.5%). Despite Thursday’s decline, European stocks remain on track to end the week higher, with the STOXX 50 up 2.3% and the STOXX 600 gaining 2.7% so far. Markets in the region will be closed on Friday in observance of the Easter holiday.

European equity markets are set to open lower on Thursday, giving back gains from the previous session after President Donald Trump indicated that the Iran conflict would continue. In his rare prime-time address, Trump noted that the US would strike Iran “extremely hard” in the coming weeks, arguing that key military objectives were close to being achieved and the conflict nearing an end. However, he provided no timeline for an exit, leaving investors uncertain about the scope and duration of the campaign. The statement also drove oil prices higher, reigniting concerns over inflation. In premarket trading, Euro Stoxx 50 and Stoxx 600 futures were down 2% and 1.7%, respectively.

European stocks closed sharply higher on Wednesday, tracking the positive momentum for global equity markets as hopes of an eventual de-escalation in the Iran conflict eased stagflation fears and improved risk sentiment and lowered benchmark credit costs. The Eurozone's STOXX 50 surged 2.9% to 5,732 and the pan-European STOXX 600 gained 2.5% to 598. US President Trump and Iranian officials continued to release statements aiming at de-escalation, although neither side welcomed respective conditions for a ceasefires. Still, the pullback in yields supported the heavyweight banking sector with Santander, UniCredit, and BNP Paribas all rising more than 5.5%. Tech stocks also gained amid support from US counterparts, with ASML adding 6.1%. Meanwhile, a series of upgrades from US brokers supported the defense sector, with Rheinmetall and Leonardo soaring nearly 10% each.