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European stock markets surged on Tuesday, driven by renewed optimism over a potential ceasefire between Israel and Iran, while investors await U.S. Federal Reserve Chair Jerome Powell’s testimony before Congress.
Stock Market Performance
By 03:05 ET (07:05 GMT), major European indices saw significant gains. The DAX in Germany rose by 1.9%, the CAC 40 in France climbed 1.9%, and the FTSE 100 in the U.K. gained 0.6%.
Israel-Iran Ceasefire Announcement Boosts Sentiment
U.S. President Donald Trump announced that the ceasefire between Israel and Iran, which he brokered, is now officially in effect, potentially marking the end of the recent hostilities between the two nations. Trump posted on Truth Social, urging both countries to uphold the ceasefire, after initial periods of ceasefire began with Iran and Israel joining after 12 hours.
This announcement comes after the U.S. carried out airstrikes on Iranian nuclear facilities over the weekend, with Iran retaliating by targeting a U.S. airbase in Qatar on Monday. The development alleviated concerns about escalating tensions in the Middle East, which had weighed on global markets in recent days.
Powell Testimony and U.S. Rate Policy
Attention now shifts to Federal Reserve Chair Jerome Powell, who is set to testify before Congress later this week. The U.S. central bank’s recent decision to keep interest rates unchanged, despite President Trump’s calls for significant cuts, has sparked criticism. Trump has accused Powell of being “incompetent” and argued that interest rates should be significantly lower to support the economy.
The Fed’s current stance on rates has caused some market unease, with Powell also warning that tariffs imposed by the Trump administration could exacerbate inflation, making it even more challenging for the Fed to justify cutting rates further.
In the corporate sector, AstraZeneca received U.S. regulatory approval for its precision medicine Datroway, aimed at treating a specific type of lung cancer. Meanwhile, Sthree, the U.K.-based staffing company, reported a decline in net fees for the first half of fiscal 2025, reflecting tough market conditions but showed some sequential improvement.
Crude Prices Fall as Ceasefire Eases Supply Concerns
Crude oil prices dropped sharply on the back of the Israel-Iran ceasefire announcement, as fears of supply disruptions in the Middle East subsided. At 03:05 ET, Brent crude futures were down by 3.9% to $67.79 a barrel, while U.S. West Texas Intermediate (WTI) crude fell by 3.9% to $65.84 a barrel.
Both oil benchmarks had surged earlier in the week, touching five-month highs following the U.S. attacks on Iranian nuclear sites, but have since fallen, reaching their lowest levels in two weeks. The easing of tensions could allow Iran, the third-largest oil producer in OPEC, to export more oil, which is seen as a relief for the global supply outlook.
