Category: Market Summary

European equities traded cautiously higher on Tuesday, with investors pausing after a broad relief rally and turning their attention back to economic fundamentals following the easing of Middle East tensions.

The pan-European STOXX 600 rose 0.1%, remaining close to the record closing level reached in the previous session.

Major Indices Post Modest Gains

Across the region, gains were limited but broadly positive. Germany’s DAX advanced 0.2%, France’s CAC 40 added 0.3%, Italy’s FTSE MIB climbed 0.6% and Spain’s IBEX 35 rose 0.2%.

In the UK, the FTSE 100 gained 0.2%, although it continued to lag some of its European peers after missing much of Monday’s rally.

Energy Exposure Weighs on London

London’s benchmark index remained under pressure from weakness in the energy sector, with heavyweight constituents including Shell (LSE:SHEL) and BP (LSE:BP.) declining alongside oil prices following the recent ceasefire agreement.

“The FTSE 100’s lukewarm performance was in stark contrast to its European and US counterparts which charged ahead, although gains were tempered a bit in Europe amid considerable unanswered questions about this promised resolution to the Middle East conflict,” said Dan Coatsworth, head of markets at AJ Bell.

Investors Await Details of U.S.-Iran Agreement

Market sentiment continued to be supported by hopes that tensions in the Middle East are easing after U.S. President Donald Trump said a preliminary agreement to end the conflict had been signed by the United States and Iran.

However, investors remain cautious as key details of the arrangement have yet to be disclosed.

Attention Turns to Inflation and Growth

The recent market recovery has lifted European equities close to 8% higher for the year, narrowing the performance gap with the S&P 500 in the United States.

While European markets have recovered losses suffered during the conflict, analysts note that further gains may prove more difficult. Unlike the U.S. and parts of Asia, Europe lacks a large technology sector capable of fully benefiting from the artificial intelligence-driven growth trend that has powered global equity markets higher.

Market participants are also watching the impact of the European Central Bank’s earlier interest-rate increase, with future gains likely to depend on how well companies can protect margins in an environment of elevated borrowing and operating costs.

STMicroelectronics Falls After Bond Sale

Among individual stocks, STMicroelectronics (BIT:STMMI) (EU:STMPA) declined 2.5% after announcing a $1.5 billion convertible bond offering split across two tranches.

UK equities traded modestly higher on Tuesday as investors continued to evaluate the implications of the recently announced U.S.-Iran memorandum of understanding, with sentiment supported by expectations that a formal signing ceremony will take place in Geneva later this week.

By 07:14 GMT, the FTSE 100 had gained 0.25%, while Germany’s DAX rose 0.23% and France’s CAC 40 advanced 0.33%. Sterling weakened 0.10% against the U.S. dollar to trade at $1.3409.

Oil Prices Ease as Hormuz Reopening Progresses

Energy markets remained focused on developments surrounding the Strait of Hormuz, with traders continuing to factor in the gradual restoration of shipping activity through the key waterway.

Brent crude fell 0.91% to $82.41 per barrel, while WTI crude declined 0.74% to $80.15. Gold prices also moved lower, with spot gold down 0.40% at $4,326.29 per troy ounce as demand for traditional safe-haven assets softened.

Markets Monitor Next Steps in U.S.-Iran Framework

Investors remain closely focused on the U.S.-Iran agreement, which was digitally signed by President Trump and Vice President Vance ahead of a planned formal ceremony in Geneva coordinated by Switzerland, Pakistan and Qatar.

The framework links sanctions relief and Iran’s reintegration into the global economy to verified reductions in its enriched uranium stockpile, acceptance of international inspections and restrictions on support for regional militant groups.

President Trump said on Monday that commercial vessels are already moving through the Strait of Hormuz and that full clearance of the route is expected by Friday. Vice President Vance also stressed that no funds have been released under the agreement and dismissed reports suggesting otherwise.

Global Leaders Respond to Agreement

Speaking at the G7 summit in Evian, French President Macron described the agreement as “a very important step towards peace and for the global economy.”

Israeli Prime Minister Netanyahu adopted a more cautious position, reiterating that Iran would never be allowed to obtain nuclear weapons “with or without a deal.”

Meanwhile, Iran’s Foreign Ministry stated that Lebanon remains part of the broader understanding reached under the agreement, a claim that Israeli officials rejected.

UK Announces Ukraine Nuclear Fuel Support Package

At the G7 gathering, Prime Minister Starmer unveiled a £210 million package backed by UK Export Finance to support supplies of enriched uranium to Ukrainian nuclear operator Energoatom.

The agreement is intended to help power Ukraine’s nuclear facilities over the next two years and forms part of broader efforts to strengthen the country’s energy security.

The UK government is also preparing a fresh sanctions package that would increase the number of sanctioned shadow fleet and Russian LNG vessels to more than 600. Officials said Britain would be the first country to sanction several LNG vessels involved in transporting restricted Russian cargoes.

Thames Water Rescue Plan Faces Scrutiny

Back in the UK, attention remained on Thames Water after Environment Minister Emma Reynolds reportedly raised concerns with regulator Ofwat regarding the utility’s proposed £10 billion rescue package.

The creditors’ proposal is understood to have been viewed as “weak” by the government.

Thames Water, which serves around 16 million customers and carries close to £20 billion of debt, remains at risk of nationalisation if a market-based restructuring solution cannot be reached. Reynolds is expected to update Parliament on the situation later on Tuesday.

European equities traded firmly higher on Monday, building on the previous session’s gains after U.S. President Donald Trump and Iranian officials announced that an agreement had been reached to bring an end to more than 100 days of conflict. Leaders around the world welcomed the development and called for the deal to be implemented without delay.

ECB Official Warns Energy Markets Need Time to Recover

Speaking at a monetary policy conference in Frankfurt, European Central Bank Governing Council member Joachim Nagel said it could take several months before global oil supply conditions fully return to normal following the recent disruptions.

His comments came as investors continued to assess the potential economic impact of easing geopolitical tensions and lower energy prices.

German Wholesale Inflation Remains Elevated

On the economic front, data from Destatis showed that German wholesale prices increased 5.9% year-on-year in May.

Although the pace of growth slowed slightly from the 6.3% increase recorded in April, wholesale inflation remained elevated following the reduction of the energy tax on mineral oil products.

Major European Indices Move Higher

Germany’s DAX Index gained 1.4%, while France’s CAC 40 advanced 1.3%.

In contrast, the UK’s FTSE 100 traded only marginally above the flatline, underperforming its continental peers despite the broader positive sentiment across European markets.

Airlines and Luxury Shares Lead the Rally

Travel and luxury goods stocks were among the strongest performers as investors welcomed the sharp decline in oil prices.

At the same time, energy companies came under pressure after Brent crude futures dropped more than 4%, falling toward $83 per barrel and reaching their lowest level in three months.

Bayer and Schneider Electric Post Strong Gains

Bayer AG (TG:BAYN) moved higher after announcing that its low-dose Gadoquatrane product had received approval from the U.S. Food and Drug Administration.

Schneider Electric (EU:SU) also posted notable gains after unveiling a partnership with Foxconn focused on artificial intelligence data centre infrastructure.

Frasers Group Falls After Accent Group Bid

Elsewhere, Frasers Group (LSE:FRAS) traded lower after launching an all-cash takeover proposal for Accent Group.

Investors appeared cautious about the acquisition despite the broader strength seen across European equity markets.

UK-listed mining and aviation stocks moved higher on Monday after the United States and Iran announced a peace agreement designed to end hostilities in the Middle East and pave the way for the reopening of the Strait of Hormuz.

The development triggered a sharp decline in oil prices, boosting investor sentiment toward sectors that stand to benefit from lower energy costs and improved global economic conditions.

Crude Prices Slide on Prospects of Restored Supply

Brent crude fell more than 5%, moving toward $82 per barrel, while U.S. West Texas Intermediate dropped by over 5% to around $80 per barrel.

The sell-off followed comments from U.S. President Donald Trump indicating that energy exports from the Persian Gulf could soon resume, alongside the removal of a U.S. blockade affecting Iranian ports.

Markets interpreted the announcement as a significant step toward restoring oil flows through one of the world’s most strategically important shipping routes.

Iran Confirms Agreement

Iranian Deputy Foreign Minister Kazem Gharibabadi confirmed that an agreement had been reached and said the full text would be released following a formal signing ceremony in Switzerland.

Reports suggest the arrangement also includes measures relating to Iran’s nuclear programme, as well as economic incentives linked to Tehran’s compliance with the terms of the deal.

Hormuz Reopening Eases Supply Concerns

Global energy markets have experienced significant disruption since the conflict began in late February.

According to Trading Economics, the near-closure of the Strait of Hormuz affected roughly one-fifth of worldwide oil shipments, raising concerns over supply security and contributing to elevated crude prices throughout the conflict.

The prospect of a reopening has therefore been welcomed by investors seeking greater stability in global energy markets.

Mining Stocks Lead Gains

Mining companies were among the strongest performers on the London market as commodity-linked shares attracted buying interest.

Fresnillo (LSE:FRES), Endeavour Mining (LSE:EDV) and Anglo American (LSE:AAL) all traded higher, posting gains ranging between 1.8% and 6.9%.

The sector benefited from improved risk appetite and expectations that easing geopolitical tensions could support broader economic activity.

Airline Sector Benefits from Lower Fuel Costs

Airline stocks also advanced as falling oil prices improved the outlook for fuel expenses, one of the industry’s largest operating costs.

Wizz Air (LSE:WIZZ), Jet2 (LSE:JET2) and EasyJet (LSE:EZJ) gained between 1.4% and 6.2% as of 04:48 ET (08:48 GMT).

Investors viewed the decline in crude prices as a positive development for airline profitability, particularly if lower energy costs are sustained in the months ahead.

Global markets began the week on a positive note after the United States and Iran announced an interim peace agreement, easing concerns over a conflict that has weighed on economic sentiment and energy markets for more than three months.

Investors welcomed indications that the Strait of Hormuz could reopen later this week, triggering gains in equity futures while oil prices retreated sharply. Gold extended its advance and the U.S. dollar weakened as traders assessed both the geopolitical implications of the agreement and its potential impact on monetary policy.

U.S. Futures Point to Stronger Open

As of 03:03 ET (07:03 GMT), Dow Jones futures were up 492 points, or 1.0%, while S&P 500 futures gained 1.2%. Nasdaq 100 futures outperformed, rising 1.9%.

Deutsche Bank analysts said, “The fizz in staying in markets this morning as after 107 days and a seemingly endless number of false dawns, we finally have a deal between the U.S. and Iran to end the war and open the Strait of Hormuz.”

The advance followed a strong finish to last week, when optimism over a possible diplomatic resolution boosted sentiment. Investor enthusiasm was also fuelled by SpaceX (NASDAQ:SPCX), whose shares remained above their $135 IPO price after a landmark public debut.

The company’s valuation has surpassed $2 trillion, while other space-related stocks, including Rocket Lab (NASDAQ:RKLB) and Planet Labs (NYSE:PL), also attracted buying interest.

Agreement Raises Hopes of Regional Stability

Although the full terms have not yet been released, both Washington and Tehran have confirmed that an agreement has been reached and is expected to be formally signed in Switzerland on Friday.

Reports indicate that the framework could include a 60-day period for negotiations over Iran’s nuclear programme. President Donald Trump told the Wall Street Journal that Iran had agreed not to pursue nuclear weapons, although this commitment was not mentioned in his public social media statements.

Pakistani Prime Minister Shehbaz Sharif, who helped mediate the talks, said the two countries had “declared the immediate and permanent termination of military operations on all fronts.”

Oil Extends Decline on Hormuz Reopening Prospects

Crude prices fell sharply after Trump announced that the Strait of Hormuz would reopen on Friday following mine-clearing operations.

Brent crude dropped 5.1% to $82.84 per barrel, while WTI crude fell 5.8% to $79.93 per barrel.

Trump also indicated that the U.S. naval blockade of Iranian ports would be lifted simultaneously, potentially restoring shipping activity through a route that previously handled around 20% of global oil and LNG trade.

Despite the sell-off, ING analysts cautioned that a lasting return to pre-war price levels is far from certain.

“Financial markets are once again excited about a potential Middle East peace deal and the possible resumption of energy flows out of the Gulf. Whether that delivers much lower energy prices is highly questionable,” they said.

Gold Advances While Dollar Retreats

Gold benefited from the weaker dollar and changing expectations for inflation and interest rates.

Spot gold climbed 2.3% to $4,315.44 per ounce, marking its highest level since 9 June, while gold futures rose to $4,336.17 per ounce.

The decline in the dollar reduced the cost of gold for international buyers and added further support to bullion prices.

Fed Decision Remains in Focus

Attention is now turning to the Federal Reserve’s policy announcement later this week.

Markets broadly expect rates to remain unchanged, although investors continue to debate the longer-term outlook for borrowing costs following recent inflation data.

Vital Knowledge analysts noted that “[I]t’s still very likely that the easing bias will be removed from the FOMC statement.”

However, they added that Fed Chair Kevin Warsh “could put his thumb on the scale during the [post-decision] press conference and tip things in a dovish direction by reiterating” comments from policymakers suggesting rate cuts could become appropriate if tensions with Iran eased.

European stock markets surged at the start of trading as investor optimism strengthened after the United States and Iran announced a peace agreement, easing concerns over energy supplies and geopolitical tensions.

The pan-European STOXX 600 climbed to a new all-time high, building on gains recorded at the end of last week when indications first emerged that a diplomatic solution between Washington and Tehran was nearing completion.

The positive momentum followed confirmation from U.S. President Donald Trump on Sunday that the two countries had agreed to immediately end hostilities and reopen the Strait of Hormuz, one of the world’s most important shipping routes for oil and gas exports.

Iranian Deputy Foreign Minister Kazem Gharibabadi later reinforced the announcement, stating on state television that the agreement had been finalized and would be formally signed on Friday.

Major European Indices Rally

The improved geopolitical outlook triggered broad-based gains across European equity markets.

France’s CAC 40 advanced 1.6%, while Germany’s DAX added 1.8%. London’s FTSE 100 gained 0.9%, and Italy’s FTSE MIB outperformed with a rise of 2.5%.

Investors welcomed the prospect of lower energy costs and a reduction in geopolitical risk, driving buying activity across multiple sectors.

Airlines Lead Gains as Oil Prices Retreat

The sharp decline in crude prices provided a significant boost to airline stocks, which are among the biggest beneficiaries of lower fuel costs.

Air France (EU:AF) rose 5.2%, British Airways parent ICAG (LSE:IAG) gained 4.6%, and Lufthansa (TG:LHA) advanced 5.6%.

The easing of energy prices is expected to improve operating margins across the aviation industry, while also supporting broader consumer demand for travel.

Lower Inflation Expectations Support Rate-Sensitive Sectors

The combination of weaker oil prices and the planned reopening of the Strait of Hormuz is expected to ease inflationary pressures across the Eurozone, which remains heavily dependent on energy imports from the Middle East.

As a result, investors have reduced expectations for tighter monetary policy. Market participants are reassessing the outlook for interest rates as lower energy costs could lessen the need for restrictive policy measures.

Real estate stocks, which tend to be sensitive to interest-rate expectations, moved higher. Segro (LSE:SGRO) gained 2.6%, while Unibail-Rodamco-Westfield (EU:URW) rose 1.4%.

Corporate Movers Add to Market Strength

Among individual stocks, Saint-Gobain (EU:SGO) climbed 5.4% after announcing the sale of its specialist distribution business to Kesko in a deal valued at $1.7 billion.

Renault (EU:RNO) also performed strongly, rising nearly 6% after unveiling a new partnership with Thales (EU:HO).

The combination of easing geopolitical tensions, lower oil prices and positive corporate developments helped propel European equities to fresh record levels.

European airline and luxury goods stocks moved higher on Monday, while energy companies came under pressure after the United States and Iran announced a preliminary agreement aimed at ending hostilities and reopening the Strait of Hormuz.

The prospect of renewed access to one of the world’s most important energy shipping routes triggered a sharp decline in oil prices, pushing crude benchmarks to their lowest levels in three months.

By 08:31 GMT, Brent crude had fallen 4.5% to $83.41 per barrel, while U.S. West Texas Intermediate dropped 5.5% to $80.28 per barrel. Both contracts touched their weakest levels since 10 March, extending declines of more than 3% recorded on Friday.

Energy Sector Retreats as Crude Prices Fall

The decline in oil prices weighed heavily on European energy shares.

Among the biggest movers were Equinor (TG:DNQ), TotalEnergies (EU:TTE), Eni (BIT:ENI), BP (LSE:BP.), Shell (LSE:SHEL), Neste (TG:NEF) and Repsol (TG:REP), all of which recorded losses ranging from 3.5% to 6%.

Investors reassessed the outlook for energy markets amid expectations that a reopening of the Strait of Hormuz could improve global oil supply flows and reduce geopolitical risk premiums.

Travel and Luxury Companies Benefit

While oil producers struggled, sectors that typically benefit from lower fuel costs and improving consumer sentiment outperformed.

Luxury goods companies posted solid gains, with LVMH (EU:MC) rising 2.4%. Shares in Hermès (EU:RMS), Ferrari (BIT:RACE), Dior (EU:CDI), Kering (EU:KER) and Brunello Cucinelli (BIT:BC) advanced between 2% and 4%.

Travel-related stocks also attracted buyers, with Lufthansa (TG:LHA), TUI (TG:TUI1), IAG (LSE:IAG), Accor (EU:AC) and easyJet (LSE:EZJ) climbing between 1.7% and 6.1%.

Hormuz Reopening Boosts Market Sentiment

President Trump said on Sunday that the Strait of Hormuz, a vital route for global oil and gas shipments that Iran has effectively restricted for several months, would reopen without tolls. He also announced that the U.S. naval blockade of Iranian ports would be lifted.

The development was interpreted by markets as a significant step towards easing tensions in the region and restoring normal trade flows.

Agreement Expected to Be Signed This Week

According to Pakistani Prime Minister Shehbaz Sharif, whose government helped facilitate the negotiations, a memorandum of understanding is expected to be signed in Switzerland on Friday.

Iran’s semi-official Mehr news agency reported that the draft agreement envisages the reopening of the Strait of Hormuz within 30 days under arrangements managed by Iran.

Iranian Deputy Foreign Minister Kazem Gharibabadi added that negotiations on a broader settlement would take place during a 60-day ceasefire period.

UK and European equities moved higher on Monday after the United States and Iran announced a peace agreement that included the reopening of the Strait of Hormuz, easing fears over global energy supplies and sending oil prices sharply lower.

The FTSE 100 gained 0.70% in early trading, while Germany’s DAX rose 1.88% and France’s CAC 40 advanced 1.69%. Sterling strengthened 0.22% against the U.S. dollar to $1.3436.

Peace Agreement Signals End to Hostilities

Pakistani Prime Minister Shehbaz Sharif announced the agreement on social media, stating that both sides had agreed to “the immediate and permanent termination of military operations on all fronts, including in Lebanon,” with a formal signing ceremony scheduled for 19 June in Geneva.

U.S. President Donald Trump later confirmed the agreement, writing on Truth Social, “The Deal with the Islamic Republic of Iran is now complete. Congratulations to all! I hereby fully authorize the toll free opening of the Strait of Hormuz, and, simultaneously herewith, authorize the immediate removal of the United States Naval blockade. Ships of the World, start your engines. Let the oil flow!”

The announcement helped calm markets that had been concerned about disruption to one of the world’s most important oil shipping routes.

Oil Prices Tumble as Strait of Hormuz Reopens

Energy markets reacted strongly to the prospect of restored shipping through the Strait of Hormuz.

Brent crude fell 4.91% to $83 per barrel, while U.S. benchmark WTI crude dropped 5.67% to $80.05 per barrel. The sharp decline reflected expectations of improved supply flows and reduced geopolitical risk in the region.

Meanwhile, gold moved higher as investors continued to assess the broader implications of the agreement, with spot gold rising 2.26% to $4,314.53 per troy ounce.

Differences Emerge Over Terms of Agreement

Despite the positive market reaction, differing interpretations of the agreement quickly surfaced.

Iran’s Supreme National Security Council confirmed that military operations would cease “immediately and permanently” and said formal signing would take place on 19 June. The council also indicated that negotiations on a final settlement would begin only after commitments made by the other side had been fulfilled.

Iranian officials subsequently stated that a 60-day negotiation process would commence only after the United States released frozen Iranian assets, lifted the naval blockade and formally ended the conflict.

However, a senior U.S. official disputed that characterisation, telling Axios, “This is completely not true. This is a pay-for-performance deal and no frozen funds will be released without the Iranians implementing their commitments.”

Reports from Iran’s state-affiliated Mehr News suggested a draft memorandum included the staged release of $24 billion in frozen Iranian assets, although neither Washington nor Tehran officially confirmed those details.

Regional Tensions Remain

Questions also remain over the wider regional implications of the agreement.

Shortly before the deal was announced, Israel carried out a strike against a Hezbollah command centre in Beirut’s southern suburbs, prompting criticism from President Trump, who wrote: “This morning’s attack on Beirut should not have happened.”

According to Israeli media reports, Prime Minister Benjamin Netanyahu told Trump that Israel would not withdraw from Lebanon and did not consider itself bound by provisions relating to Lebanon contained within the agreement.

UK Corporate Round-Up

In company news, Sigma Healthcare withdrew from the process to acquire Boots Group, stating that a potential transaction no longer aligned with its strategic objectives or capital allocation priorities.

Meanwhile, the Financial Times reported that the BBC is preparing to cut hundreds of positions within its core news division as part of a broader restructuring programme that could result in around 2,000 job losses and generate substantial cost savings across the organisation.

U.S. stock futures moved higher on Friday, indicating that markets could build on Thursday’s powerful rally as investors reacted positively to fresh signs that a diplomatic breakthrough between Washington and Tehran may be approaching.

Sentiment remained supported after President Donald Trump once again suggested that negotiations with Iran were nearing a conclusion.

Reports Indicate Agreement Could Be Near

According to Axios, a proposed memorandum of understanding between the United States and Iran would include the immediate reopening of the Strait of Hormuz without transit fees, alongside sanctions relief for Iran tied to compliance with the agreement.

The report cited both a U.S. official and a diplomat involved in the mediation process. The diplomat said the two sides “have agreed on the text of a deal,” although final approval is still pending.

The framework would reportedly extend the current ceasefire by 60 days, including in Lebanon, while nuclear discussions continue.

Bloomberg separately reported that the agreement could be formally signed during next week’s G7 summit.

Investors Continue to Embrace Positive Headlines

Despite previous setbacks in negotiations, investors appeared willing to respond positively to the latest developments.

“The maxim ‘once bitten, twice shy,’ isn’t being applied by the market when it comes to Donald Trump’s pronouncements, as his latest of several suggestions a deal is close has helped to drive stocks higher once more,” said Dan Coatsworth, head of markets at AJ Bell.

He added, “Whether momentum can be sustained depends on positive noises about a resolution translating into something more solid in the coming days.”

Major Indexes Rebounded Strongly on Thursday

U.S. equities spent much of Thursday trading without a clear direction before staging a sharp afternoon rally.

The major averages recovered from the previous session’s weakness and ended the day with substantial gains.

The Nasdaq climbed 640.16 points, or 2.5%, to finish at 25,809.66. The Dow Jones Industrial Average rose 929.97 points, or 1.9%, to 50,848.75, while the S&P 500 advanced 127.31 points, or 1.8%, to 7,394.30.

Oil Slides After Trump Cancels Planned Military Action

The market rally gathered pace after oil prices tumbled in response to Trump’s decision to call off planned strikes against Iran.

In a Truth Social post, Trump said the move was “based on the fact that discussions with the Islamic Republic of Iran have been brought to the highest level of Iranian leadership and approved.”

The statement represented a dramatic reversal from earlier comments in which he warned that the United States would hit Iran “very hard tonight” and indicated he intended to take control of the country’s oil and gas markets “at some point in the not too distant future.”

Bargain Hunters Return to the Market

The rally was also supported by investors taking advantage of lower valuations following the previous day’s decline.

That weakness had pushed both the Nasdaq and the S&P 500 to their lowest closing levels in a month, encouraging fresh buying interest.

Inflation Report Fails to Dampen Sentiment

Markets largely brushed aside stronger-than-expected producer inflation data released by the Labor Department.

The Producer Price Index for final demand increased 1.1% in May, matching the revised gain seen in April.

Economists had forecast a rise of 0.7%.

On an annual basis, producer price inflation accelerated to 6.5% from 5.7%, marking its highest level since November 2022.

Nevertheless, geopolitical developments and falling energy prices remained the dominant market drivers.

Chipmakers Lead the Charge

Semiconductor companies were among the strongest performers of the session.

The Philadelphia Semiconductor Index surged 7.9%.

Intel (NASDAQ:INTC) jumped 9.2% after Bank of America upgraded the stock from Underperform to Buy.

Airline Stocks Soar as Fuel Costs Ease

Airline shares also benefited from the sharp decline in oil prices, which improved expectations for operating margins.

The NYSE Arca Airline Index climbed 7.5%, making it one of the top-performing industry groups on the day.

Mixed Results Across Sectors

Networking companies, gold miners and computer hardware manufacturers all participated in the rally.

However, energy stocks moved lower alongside crude oil prices, while software companies underperformed despite the broader market strength.

European equity markets moved decisively higher on Friday after U.S. President Donald Trump stated that a “great settlement” had been reached to end the conflict involving Iran, adding that a formal signing ceremony could take place in Europe as soon as this weekend.

Iranian officials, however, maintained a more cautious stance, saying that no final agreement had yet been approved and that key issues, including frozen assets and security arrangements in the Strait of Hormuz, remained under discussion.

German Inflation Eases in Line With Expectations

On the economic front, final figures from Germany’s statistics office Destatis showed inflation slowed in May, primarily due to a moderation in energy price increases.

Consumer price inflation was confirmed at 2.6% year-on-year, down from 2.9% in April, which had marked the highest reading since December 2023.

The harmonised measure used across the European Union also eased to 2.7%, matching preliminary estimates and falling from 2.9% in the previous month.

French Inflation Reaches Highest Level Since Early 2024

In France, data from statistics agency INSEE showed consumer prices increased by 2.8% year-on-year in May.

The reading represented the fastest pace of inflation since February 2024 and highlighted continuing price pressures within the French economy.

UK Economy Contracts in April

In the United Kingdom, official figures showed economic activity weakened in April as the services sector lost momentum.

According to the Office for National Statistics, real GDP declined by 0.1% during the month, reversing the 0.3% growth recorded in March.

The decline was the first monthly contraction since August 2025 and matched economists’ expectations.

Separate trade data showed the UK’s visible trade deficit narrowed to £26.05 billion in April from £27.22 billion in March, as exports increased while imports declined.

Major European Indices Post Strong Gains

Investor sentiment improved across regional markets, lifting the main European benchmarks.

France’s CAC 40 advanced 1.6%, Germany’s DAX climbed 1.3%, and the UK’s FTSE 100 gained 1%.

Banking Stocks Lead the Rally

Financial stocks were among the strongest performers during the session.

Shares of Commerzbank (TG:CBK), Deutsche Bank (TG:DBK), BNP Paribas (EU:BNP) and Barclays (LSE:BARC) all moved between 4% and 5% higher as investors rotated into the sector.

Travel Stocks Benefit From Falling Oil Prices

Travel and leisure companies also attracted buying interest as lower crude prices improved the outlook for operating costs.

easyJet (LSE:EZJ), Lufthansa (TG:LHA) and Air France (EU:AF) posted gains ranging from 3% to 8%.

Kier Rallies on Contract Extension

Among individual movers, infrastructure, construction and property group Kier (LSE:KIE) advanced sharply after securing a contract extension valued at approximately £140 million from South West Water.

The agreement provided a boost to investor confidence in the company’s future revenue visibility.

McBride Falls After Profit Warning

In contrast, shares of McBride (LSE:MCB) came under significant pressure in London.

The manufacturer of private-label cleaning products issued a profit warning, citing rising raw material and energy costs as key factors weighing on earnings expectations.