European equities opened slightly in positive territory on Wednesday, as investors reacted cautiously to Donald Trump’s decision to extend the ceasefire with Iran indefinitely, even as tensions around key energy routes persist.
By 07:08 GMT, the Stoxx 600 rose 0.3%, while DAX gained 0.4%, CAC 40 added 0.2%, and the FTSE 100 remained broadly flat.
Trump announced via social media late Tuesday that the ceasefire with Iran would be prolonged just before its scheduled expiration, noting that the extension followed a request from Pakistan, which has often acted as a mediator between Washington and Tehran. He said the truce would remain in place “until such time as” Iranian authorities present a “unified proposal” for peace.
However, the extension was declared unilaterally, leaving uncertainty over how both Iran and U.S.-ally Israel will respond. Plans for U.S. Vice President JD Vance to travel to Pakistan for further negotiations were also paused after Iranian state media described the talks as a “waste of time because the U.S. prevents reaching any suitable agreement.”
“While there is still a bit of skepticism and cynicism in the market about Iran, most are of the view that Operation Epic Fury is past its peak, with an agreement of some sort more likely than not,” analysts at Vital Knowledge said, referring to the U.S. campaign in the region.
At the same time, a U.S. naval blockade of Iranian ports remains in force, and tanker flows through the Strait of Hormuz are still heavily restricted. Disruptions in this critical passage—through which roughly 20% of global oil supply moves—have heightened concerns about energy-driven inflation and the potential for further interest rate increases.
Those concerns were reinforced by fresh data showing UK inflation climbed to 3.3% in March, driven largely by a sharp rise in fuel costs.
“[W]ith very little shipping traffic passing through the Strait of Hormuz, our view is that the likes of diesel, other refined products and other commodities, will continue to reman elevated which leaves us cautious on the growth outlook,” said Patrick O’Donnell.
Brent crude, the global oil benchmark, slipped slightly to around $98 per barrel after earlier spikes following the outbreak of conflict, though it remains well above pre-war levels. Europe is also contending with disruptions to natural gas supply linked to damage at Middle Eastern facilities, particularly in Qatar, keeping energy prices elevated.
Earnings in Focus
Alongside geopolitical developments, investors were monitoring a wave of corporate earnings to assess the broader impact of the conflict on businesses.
ABB (BIT:1ABB) gained more than 5% after raising its full-year sales outlook, citing resilient demand despite ongoing uncertainty.
AkzoNobel (EU:AKZA) also moved higher after reporting a smaller-than-expected drop in first-quarter core profit, supported by pricing actions and cost control measures.
Meanwhile, Tele2 (BIT:1TEL) rose after posting 11% growth in underlying core profit and a 3% increase in revenue for the quarter.
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