European Stocks Close Sharply Higher

The Euro STOXX 50 gained 2% and the STOXX Europe 600 closed 1.8% higher on Friday amid lower oil prices after the Iranian foreign ministry claimed it was close to a deal with the US. The statement improved confidence over the gradual return of energy exports from the Persian Gulf after conflicting rhetoric from US President Trump added volatility to the session. Sovereign yields fell and banks benefited from the improved outlook for credit, with Deutsche Bank surging 6.6% while Santander and BNP Paribas advanced over 5%. Meanwhile, ASML added 3.4%, tracking the AI infrastructure sector after SpaceX gained 15% in its IPO, adding to cash for AI companies to spend on chips and data centers. Yesterday, the European Central Bank raised interest rates for the first time in nearly three years and indicated that a restrictive monetary stance could remain through 2027.

EU50 increased to 6154.00 Index Points, the highest since February 2026. Over the past 4 weeks, Euro Area Stock Market Index (EU50) gained 4.97%, and in the last 12 months, it increased 16.29%.

The Stoxx 50 and Stoxx 600 gained more than 1% on Friday, supported by falling oil prices after President Trump halted plans for further strikes on Iran. Travel, construction and auto stocks led gains, while energy shares slightly underperformed. Among major European companies, ASML Holding rose 0.8%, LVMH climbed 3.3%, and Siemens gained more than 2%. Trump said a peace agreement with Iran could be reached as soon as this weekend in Europe, adding that the Strait of Hormuz would reopen once a deal is finalized and that Tehran would commit to avoiding nuclear weapons development. In economic news, UK data showed the economy contracted 0.1% in April after two months of growth, with the Middle East conflict beginning to weigh on activity. Meanwhile, the European Central Bank raised interest rates for the first time in nearly three years and indicated that a restrictive monetary stance could remain through 2027.