European shares moved higher at the start of the trading day on Wednesday, as investors digested President Donald Trump’s reversal on a U.S. operation to reopen the Strait of Hormuz and weighed comments that suggested momentum toward a U.S.-Iran ceasefire.
By 03:08 ET (07:08 GMT), the Stoxx 600, which tracks major European equities, was up 1.2%. Germany’s Dax rose 1.2%, France’s CAC 40 also gained 1.2%, and the U.K.’s FTSE 100 climbed 1.3%.
On Tuesday, Trump said the initiative known as "Project Freedom" - a push by the U.S. to use military assets to guide ships safely through the narrow waterway - was being halted "for a short period of time." That operation had come into effect earlier in the week, but was followed by a renewed round of attacks in the Strait of Hormuz and across the Gulf region, including strikes on sites in the United Arab Emirates.
In a social media post, the president said the change in posture had in part occurred at Pakistan’s request, and he stated that "great progress" had been made toward a ceasefire agreement. The decision also followed meetings between the foreign ministers of Iran and China. The article notes China as a key buyer of Iranian oil and reports that Beijing may be looking to dissuade Tehran from escalating tensions with the U.S. ahead of an upcoming meeting between Chinese leader Xi Jinping and Trump next week.
Following the announcement, global benchmark Brent crude futures declined by 1.5% to $108.22 a barrel, although the contract remains substantially higher than pre-war levels. Despite the pullback in prices, the Strait of Hormuz - a waterway that channels roughly one-fifth of the world’s oil - continues to be effectively closed to tanker traffic, a situation that has persisted for weeks as both the U.S. and Iran maintain blockades.
On the corporate front, several stocks recorded notable moves. Shares of Novo Nordisk jumped after the company, the maker of the Wegovy weight-loss medication, reported revenue and adjusted operating profit that exceeded expectations, providing support to a business facing intensifying competition from rivals such as Eli Lilly. Diageo’s stock also advanced, with buying interest attributed to retailers and consumers accumulating its alcoholic beverage products ahead of the soccer World Cup later in the year.
Automaker BMW in Germany posted gains, while Norwegian energy company Equinor slipped following the release of their respective quarterly results.
Market context and takeaways
- Risk-off dynamics eased as the U.S. announced a pause in Project Freedom, lifting European equities in early trading.
- Oil prices fell on the news but remain well above pre-war benchmarks, reflecting ongoing supply concerns tied to disruptions in the Strait of Hormuz.
- Company-specific earnings continued to move individual stocks, with Novo Nordisk and Diageo drawing particular investor attention.