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European stocks closed midweek in the green due to positive developments regarding the Russia-Ukraine peace process and increasing expectations that the US Federal Reserve will cut interest rates in December.

The pan-European Stoxx 600 index rose 1.09%, or 6.2 points, to close at 574.21. Bank stocks gained an average of 1.76%, and oil and gas company stocks rose 1.12%.

Germany's DAX 40 index was up 1.11% to end at 23,726.22 points, and the UK's FTSE 100 gained 0.85% to end at 9,691.58.

France's CAC 40 rose 0.88% to 8,096.43, and Italy's FTSE MIB index added 1.01% to close at 43,130.32 points.

And Spain's IBEX 35 gained 1.36% to end the day at 16,361.1 points.

The rise in the markets followed positive developments regarding the peace process between Russia and Ukraine, as well as strengthening expectations that the Fed will cut interest rates in December.

Investors are closely monitoring news that could influence the Fed's monetary policy decision, with markets pricing in a 25-basis-point cut by the Fed next month at 85%, according to CME FedWatch.

Meanwhile, the US continues to press for rapid progress in talks aimed at ending the war in Ukraine. President Trump has stated that only a few sticking points remain.

Analysts cautioned that investors have quickly become optimistic about the US peace plan and that there is no certainty of a deal in Ukraine. They warned that positive sentiment in equity markets could quickly turn negative if talks between Ukraine, the US, and Russia fail.