ISTANBUL 

European stocks rebounded sharply Wednesday, as easing fears of a prolonged Iran war lifted investor appetite for risk after the benchmark logged its worst month since 2022.

The region-wide Stoxx Europe 600 index increased 2.5% to end the midweek at 597.69 points.

Major European bourses also ended higher. Britain’s FTSE 100 rose 1.85% to 10,364.79 points, while Germany’s DAX gained 2.73% to 23,298.89.

In France, the CAC 40 added 2.1% to 7,981.27, while Italy’s FTSE MIB jumped 3.17% to 45,714.95 and Spain’s IBEX climbed 3.11% to 17,580.4.

The euro also strengthened, with the euro/dollar parity up 0.44% to 1.1604 as of 1740GMT.

The rally followed remarks by US President Donald Trump, who said Tuesday that American military operations in Iran could end within “two or three weeks,” and Washington would leave “pretty quickly” once its objectives were met.

Trump also said the war could end without a deal with Tehran, remarks that markets interpreted as a sign of possible de-escalation.

Falling energy prices also supported equities. Brent crude, the international benchmark, dropped to around $100.90 a barrel on Wednesday, while US West Texas Intermediate slipped to about $99.85, after Trump’s comments reduced some of the geopolitical risk premium built into oil markets in recent weeks.

The decline in oil prices weighed on energy shares, making oil and gas the main sector in negative territory. By contrast, sectors that had come under pressure from higher fuel costs and war-related uncertainty led the rebound. Europe’s travel and airline stocks advanced strongly, with airlines, including Air France and Lufthansa, rising more than 8%, while the Stoxx defense index jumped 5.9% and banks gained 4.5%.

In corporate news, Danish wind turbine maker Vestas said it secured fresh orders in the UK and the US. The announcements provided some support to clean energy sentiment even as broader markets focused on geopolitics.

On the data side, the unemployment rate in the euro area stood at 6.2% in February, seeing a slight increase from the previous month.