European shares rebound after Trump signals Iran deal

European shares recovered on Thursday after their steepest sell-off since March, as U.S. President Donald Trump suggested that Iran wanted to negotiate, easing fears of an all-out return to war in the Middle East.

The pan-European STOXX 600 rose 0.5% to 639.12 points by early morning trading, led by technology and basic resources stocks, which gained 1.8% and 2.8% respectively, according to Reuters. Chip stocks drove much of the rally, with Siltronic ↘ 2.03% jumping 10.5% and ASML ↗ 1.22% adding 2.6%.money.usnews

A Day After the Worst Drop Since March

The rebound followed a bruising session on Wednesday, when the STOXX 600 fell 1.8% to 634.91 points — its largest one-day decline since mid-March — after Trump declared from the NATO summit in Ankara that the ceasefire agreement with Iran was "over". Crude oil prices had surged on the remarks, with front-month WTI and Brent settling up 4.4% and 5.2% respectively on Wednesday.money.usnews+1

The U.S. military struck approximately 90 Iranian military targets on Wednesday, including air defense systems, missile storage sites, and naval capabilities, according to U.S. Central Command. The strikes followed attacks on three commercial vessels in the Strait of Hormuz.aljazeera+1

By Thursday, however, Trump had shifted tone, saying Iran wanted to "make a deal," which helped push crude oil prices marginally lower and restored some calm to markets.morningstar+1

Spain Outperforms After Trump Softens Stance

Spanish stocks outperformed the region on Thursday, rising 1.1% after rebounding from a three-week low. The recovery came after Trump described Spain as "very generous" aboard Air Force One on his return from the NATO summit, hours after ordering a halt to all trade with the country over its refusal to meet NATO's 5% GDP defense spending target.bloomberg+1

"Spain came back all the way today," Trump told reporters, according to Bloomberg. Reuters reported that a similar trade threat in March had produced no actual disruption to commerce between the two countries. Spain's government said EU customs rules prevent the singling out of individual member states in trade policy.reuters+1

Global sentiment was further buoyed by reports that China could allow domestic AI firms limited access to Nvidia's ↗ 3.65% H200 chips, suggesting continued demand for AI infrastructure.money.usnews