European Midday Briefing: Stocks Rise Amidst Hopes for Diplomatic End to Iran War

MARKET WRAPS

European stocks rose Wednesday, building on Tuesday's mostly higher close, as investors held out hope for a diplomatic resolution to the war in the Middle East.

As officials say the U.S. sent a 15-point plan to Iran to end the war, and as mediators from Turkey, Egypt and Pakistan push to have a meeting arranged between the U.S. and Iran by Thursday, the FTSE 100, the CAC 40 and the DAX rose at the opening bell.

Europe's leading Stoxx 600 index was also up as cautious optimism lifted nearly every sector excluding energy .

Chief among the risers were London-listed mining companies as well as airlines benefitting from a fall in energy prices. Approaching midday, the indexes remained in positive territory.

The moves come as European Central Bank President Christine Lagarde said that the bank would have to respond forcefully if inflation threatened to rise significantly as a result of the Iran war.

Meanwhile, Germany's business confidence tumbled this month as the energy-price shock from the war in the Middle East weighed on company outlooks.

The fall in German sentiment suggests that the energy shock could upend hopes for a recovery in the country, Capital Economics said. It downgrades its German GDP forecast for 2026 to 0.5% from 0.8%.

U.S. Markets:

Stock futures rose as optimism for an end to the fighting against Iran also lifted sentiment across the Atlantic.

Forex:

The euro fell against the dollar and the single currency was likely to struggle to sustain any recovery attempts against the dollar as energy prices remained elevated due to the Iran war, Commerzbank said.

The dollar fell slightly as tentative hopes for a resolution to the Iran war sent oil prices lower and reduced demand for safe-haven assets.

The Swiss franc fell to a six-week low against the euro as tentative hopes for a resolution to the Middle East conflict reduced demand for safe-haven assets.

Sterling stayed weaker versus the dollar and the euro after the latest U.K. inflation data was in line with expectations.

The euro traded flat against the pound and ING said that sterling could rise against the euro

if Bank of England official Megan Greene supports the case for an interest-rate rise in April when she speaks at a conference at 1200 GMT.

Bonds:

Eurozone government bond yields fell, tracking moves in Treasury yields, amid tentative optimism about a potential resolution to the Middle East conflict.

Yields on U.K. government bonds fell, along with U.S. and eurozone bond yields

Market sentiment has improved and eased concerns about prolonged tensions in the Gulf region.

Treasury yields fell and oil prices retreated slightly as officials said the U.S. has sent conditions to end the war. Yields fell across maturities, but more on short-end Treasurys than on long-end ones.

Italy and Germany have government bond auctions on Wednesday amid some relief in global markets.

"Latest ceasefire headlines argue for relief across markets, where real-yields remain in the driving seat," Commerzbank said.

Liquidity at the front end of the Treasury yield curve has deteriorated amid elevated volatility since the onset of the Middle East conflict, Morgan Stanley said.

Energy:

Oil prices fell, with Brent crude back below $100 a barrel after the U.S. sent Iran a 15-point plan to end the war and on news that mediators were pushing for a meeting between Washington and Tehran.

WTI prices, meanwhile, fell 5% to $85.23 a barrel with peace hopes overshadowing continued military strikes and the effective blockade of the Strait of Hormuz.

Natural Gas

European natural-gas prices tumbled as hopes for Middle East diplomacy overshadow mounting supply disruptions.

The key risk for Europe is rising competition with Asia for LNG cargoes just as the region seeks to refill depleted storage ahead of winter. Even if a ceasefire is reached, repairs to QatarEnergy's damaged facilities will take years.

Metals:

Gold prices climbed as diplomatic efforts to end the Middle East war and a drop in oil prices eased concerns over inflation. New York futures gained 3.2%, silver was up 5.2% while platinum rose 2.7%.

Aluminum

The global aluminum market

is expected to face a second-quarter deficit of roughly 900,000 metric tons--the largest since 2019, Goldman Sachs said, now projecting a 550,000-ton surplus this year, down from 800,000 tons previously.

Julius Baer said it believes the risk of disruption on the aluminum supply chain from the Iran conflict has likely eased as smelters reroute exports.

EMEA HEADLINES

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The Danish drugmaker agreed to pay up to $2 billion for the rights to the developmental weight-loss and obesity drug last year as it looks to boost its pipeline of next-generation drugs.

Grifols Plans IPO of U.S. Biopharma Business

Grifols said it plans an initial public offering of its U.S. biopharma business, as the Spanish pharmaceutical company seeks to raise money to bolster its balance sheet and fund investments.

Barcelona-based Grifols said late Tuesday that it would list a minority stake in the business and retain majority ownership within the parent company, which would maintain its listing in Spain.

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Diageo said it agreed to sell its Indian cricket franchise Royal Challengers Bengaluru to a consortium backed by Blackstone for 166.6 billion Indian rupees ($1.77 billion).

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Oil drillers and other energy stocks have unsurprisingly gushed this year thanks to crude prices, which have surged due to the war in Iran and resulting supply constraint concerns.

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GLOBAL NEWS

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At the center of the supply squeeze in the Middle East, traders are paying an eye-watering $160 a barrel for the Emirati oil that can dodge the Strait of Hormuz, far above those global benchmarks.

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The surge in oil prices since the Feb. 28 start of the war with Iran is set to drive headline inflation back up to 4% in coming months. Even if oil retreats to well below $100 a barrel and the effects of tariffs moderate, inflation is unlikely to return to the Fed's 2% annual inflation target for at least a few years. Input costs are on the rise due to growing demand for artificial intelligence, firmer labor costs, and other factors.

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March 25, 2026 07:06 ET (11:06 GMT)