Paris – Global stock markets are benefiting from a wave of optimism on Wednesday following statements by US President Donald Trump suggesting the end of the war in Iran within two to three weeks. European stock exchanges closed sharply higher, with the Paris Stock Exchange up 2.10%, Frankfurt up 2.73%, London up 1.85%, and Milan climbing 3.17%. In Switzerland, the SMI rose by 1.68%. On Wall Street around 4:00 PM GMT, the Dow Jones was up 0.94%, the Nasdaq rose by 1.62%, and the S&P 500 gained 1.10%. “Since American stocks have been more resilient, the potential for an increase is stronger in Europe,” said Christopher Dembik, investment strategy advisor at Pictet AM, attributing the highest rise in European stock markets to speculative factors. Overall, major stock indices saw a significant increase on Wednesday, driven by President Trump’s statements hinting at the possible end of the conflict with Iran, stated Patrick Munnelly of Tickmill Group. President Trump mentioned on Wednesday that the Iranian president was requesting a ceasefire, but ruled out a truce without the reopening of the strategically important Strait of Hormuz, which Iran has been blockading, destabilizing the global economy. The American president also mentioned a possible end to the war within “two or three weeks”, with or without an agreement. He is set to provide “important new information on Iran” in a speech scheduled for late Thursday in the US at 01:00 GMT, according to the White House. Donald Trump’s statements “hinted at a possible resolution of the conflict with Iran. Washington appeared open to direct negotiations with Tehran and mentioned the possibility of de-escalation even without a formal agreement,” highlighted Mr. Munnelly. “However, there are still significant uncertainties,” noted Fawad Razaqzada, a market analyst for Forex.com. “The main concern revolves around the Strait of Hormuz, a passage for 20% of global oil supplies.” Iran’s Revolutionary Guards, the ideological army of the Islamic Republic, stated that the Strait of Hormuz would remain closed to the country’s “enemies.” On the ground, the perimeter wall of the former US embassy in Iran, a symbolic site of hostility between the two countries in central Tehran, was damaged on Wednesday morning. The day before, steel complexes in the center and southwest of the country were also affected. Trump’s statements have also calmed the oil market, but Brent hovering around $100 per barrel shows that the market is not completely convinced, tempered Fawad Razaqzada. The global benchmark crude, Brent from the North Sea, remained lower but exceeded $100 per barrel ($101.82, -2.07%). Its American counterpart, WTI, was trading at $99.60 (-1.76%) around 4:00 PM GMT. Even if Trump’s statements boosted immediate stock action, “disruptions in the energy sector would persist for several months and likely impact both inflation and economic growth,” noted Emma Wall, chief investment strategist for Hargreaves Lansdown. “There are simply too many uncertainties, both regarding supply disruptions and geopolitical escalation, for prices to significantly readjust downward at the moment,” summarized Mr. Razaqzada. “Calmer conditions are also felt in the bond market, weighed down by inflation risks concerning investors.” Germany’s 10-year bond yield dropped below 3% for the first time in several days (2.99%). The French equivalent showed a 10-year yield of 3.68%, down from 3.72% the previous day. Bond yields rise with inflation risks as investors seek guarantees against the erosion of their capital. “The relaxation primarily came from bond yields, which is quite typical: the bond market often anticipates turning points,” analyzed Antoine Andreani, head of analysis at XTB. “Equities simply followed suit. At the moment, it’s more about a technical rebound than a real turnaround.”
