European Stocks Up More than 2%

European stocks rose on Wednesday, with both the STOXX 50 and the STOXX 600 gaining more than 2%, extending the previous session’s rally. The move came as oil prices declined for a second consecutive day, amid hopes that a resolution to the conflict with Iran could be reached soon. US President Trump announced a pause in “Project Freedom” and cited "great progress" towards a comprehensive peace agreement. Meanwhile, the earnings season remains in full swing. Shares of Novo Nordisk surged 7% after the company raised its full-year profit guidance, while AXA climbed 2.5% following a 6% increase in first-quarter revenue. BMW surged 5% after the carmaker beat earnings estimates, despite reporting a sharp decline in pre-tax profit. In contrast, Equinor fell 5% even though it posted stronger-than-expected profits.

European equity markets were poised for a solid open on Wednesday, building on sharp gains from the previous session as easing tensions in the Middle East and strong corporate earnings supported sentiment. The US reaffirmed its ceasefire with Iran, confirmed that offensive operations have ended, and temporarily paused efforts to assist stranded vessels exiting the Strait of Hormuz to allow time for potential renewed negotiations. On the corporate front, German chipmaker Infineon Technologies issued a stronger-than-expected revenue outlook for the current quarter, buoyed by a surge in spending on AI infrastructure. Danish pharmaceutical group Novo Nordisk also indicated that this year’s sales decline may be less severe than initially anticipated, supported by improving demand for its Wegovy obesity treatment. Investors will also assess earnings from BMW, Daimler Truck and AXA, among others. In premarket trading, Euro Stoxx 50 and Stoxx 600 futures both advanced by more than 1%.

European stocks closed sharply higher on Tuesday, benefiting from some respite in global energy prices and a batch of optimistic corporate earnings. The Eurozone's STOXX 50 rose 1.8% to 5,870 and the pan-European STOXX 600 advanced 0.7%. Heavyweight industrials surged amid the pullback in oil and natural gas prices that Europe imports, with Siemens, Schneider, and Siemens Energy jumping between 5% and 3%. The war in Iran did not escalate to more aggressive striking following brief attacks from the US and Iran yesterday. Meanwhile, AB InBev surged close to 10% after beating estimates for its first-quarter earnings and recording the first growth in sales in around three years. UniCredit soared close to 7% after posting higher profits, raising its full-year outlook, and launching its bid to raise its stake in Commerzbank. Also, Rheinmetall jumped 3.3% after reporting a 7.7% increase in earnings.