European Stocks Rise as Trump Pauses Hormuz Operation
European stock markets opened higher on Wednesday as investors reacted positively to U.S. President Donald Trump pausing a military-backed operation aimed at reopening the Strait of Hormuz.
Markets were also supported by growing optimism that a diplomatic agreement between the United States and Iran could be approaching.
By 03:08 ET (07:08 GMT), the pan-European STOXX Europe 600 rose 1.2%.
Germany’s DAX gained 1.2%, France’s CAC 40 climbed 1.2%, while the U.K.’s FTSE 100 advanced 1.3%.
Trump Halts Project Freedom Operation
On Tuesday, Trump announced that “Project Freedom” — the U.S. operation intended to restore shipping through the Strait of Hormuz using military escorts — would be paused temporarily.
The initiative had only recently begun and was quickly followed by renewed attacks in the Strait of Hormuz and surrounding Gulf region, including strikes targeting sites in the United Arab Emirates.
In a social media statement, Trump said the pause came partly at the request of Pakistan, which has frequently acted as a mediator between Washington and Tehran.
Trump also claimed that “great progress” had been made toward reaching a ceasefire agreement.
China-Iran Talks Raise Hopes for De-Escalation
Trump’s decision came shortly after talks between Iranian and Chinese foreign ministers.
China remains one of the largest buyers of Iranian oil, and reports suggest Beijing may be encouraging Tehran to avoid further escalation with the United States.
The diplomatic push comes ahead of an expected meeting next week between Chinese President Xi Jinping and Trump.
Investors interpreted the developments as a sign that geopolitical tensions in the Middle East could begin easing.
Oil Prices Decline but Hormuz Remains Closed
Oil prices moved lower following Trump’s announcement.
Brent crude futures, the global benchmark for oil prices, declined 1.5% to $108.22 per barrel.
Despite the decline, Brent prices remain well above levels seen before the conflict began.
The Strait of Hormuz, which handles roughly 20% of the world’s oil supply, remains effectively closed to tanker traffic after weeks of disruption.
Both the United States and Iran continue maintaining naval blockades in the region.
Novo Nordisk and Diageo Lead Individual Stock Gains
Among individual European stocks, shares of Novo Nordisk surged after the maker of the popular Wegovy weight-loss drug reported stronger-than-expected revenue and adjusted operating profit.
The results provided relief for the company as it faces growing competition from rivals including Eli Lilly and Company.
Meanwhile, shares of Diageo also climbed as investors anticipated stronger demand for alcoholic beverages ahead of this year’s soccer World Cup tournament.
German automaker BMW posted gains following its latest quarterly results, while Norwegian energy giant Equinor moved lower after releasing earnings.
