European share indexes started the trading session higher on Wednesday as market participants positioned ahead of a pivotal Federal Reserve decision and monitored continued conflict in the Middle East.
By 04:09 ET (08:09 GMT), the pan-European Stoxx 600 had risen 0.5% to 605.42. National bourses also posted early gains: Germany's Dax was up 0.6%, France's CAC 40 advanced 0.7%, and the U.K.'s FTSE 100 climbed 0.2%.
Traders said the region benefited from a positive carryover from Asian markets, where a rebound in technology stocks helped lift sentiment. Still, market participants retained a cautious tone ahead of the Federal Reserve's policy announcement, widely expected to conclude a two-day meeting with no change to interest rates.
Attention is concentrated on the language Fed Chair Jerome Powell and his colleagues will use to describe the outlook for monetary policy. Investors want to understand how officials plan to respond to rising inflationary pressures linked to the war in Iran.
That conflict has added to energy market strain after the temporary closure of the Strait of Hormuz - a crucial maritime route south of Iran through which about one-fifth of the world's oil is shipped. The shutdown has been associated with a marked jump in oil and gas prices, raising concerns that renewed energy-driven inflation could prompt central banks to adopt a firmer stance on rates.
European nations and many in Asia are net energy importers, leaving them particularly exposed to supply disruptions stemming from the Strait of Hormuz. The European Central Bank, set to announce its own policy decision on Thursday, is not expected to lower rates this year despite recent signs that inflation has been restrained and growth remains weak.
Oil prices were softer in early European trading but remain substantially higher than earlier in the year. Brent crude, the global benchmark, last fell 1.3% to $102.10 a barrel. U.S. West Texas Intermediate futures were down 2.3% at $93.25 a barrel.
Some relief for markets that had been starved of supply from Gulf producers came from the resumption of crude exports via pipeline from Iraq's Kirkuk fields to Turkey's Ceyhan port. Nevertheless, prices have stayed elevated amid limited signs of de-escalation in the fighting in the region.
Brent has climbed from roughly $71 a barrel prior to the outbreak of the joint U.S.-Israeli assault on Iran in late February.
Recent military actions include U.S. strikes on Iranian cruise missile sites near the Strait of Hormuz using 5,000-pound bombs. Earlier in the week, Israeli strikes killed senior Iranian figures. A call by President Donald Trump for international assistance in reopening the strait was widely rebuffed.
In sum, markets opened positively but unevenly as investors balanced the lift from Asian tech stocks with the macro uncertainty that elevated energy prices and central bank responses could create. The focus remains squarely on central bank communications this week and any signs of further geopolitical escalation in the Middle East.