The ceasefire between the United States and Iran has been going on for two weeks, and European stock markets have recorded their largest increase in nearly a year.

The message of the ceasefire agreement between the United States and Iran for two weeks in exchange for Tehran reopening the Strait of Hormuz has driven investors into the stock market, pushing European stocks to their biggest gain in nearly a year. The STOXX 600 index in Europe rose by 3.5%, marking the largest single-day increase since April 2025. Due to a sharp drop in energy prices, shares of Antofagasta Plc, ArcelorMittal, and EasyJet soared by over 13%, leading the index. It is understood that on Tuesday evening, US President Trump announced through social media that the US had reached a temporary ceasefire agreement with Iran for two weeks. This decision came less than two hours before the deadline set by Trump to "reopen the Strait of Hormuz". Under the agreement, the US will pause military strikes against Iranian infrastructure, while Iran has pledged to fully, immediately, and safely reopen the Strait of Hormuz. This strategic passage carries about 20% of global oil shipments. The Pakistani government played a key role in mediating this agreement, and formal talks are expected to begin in Islamabad this Friday. Following the strong "relief rebound" in the European market on Wednesday, the STOXX 600 index opened with a 3.6% increase, marking the largest single-day gain since April 2025. Major national indices showed strong performance: Germany's DAX index surged by about 5%, France's CAC 40 index rose by 3.6%, and the UK's FTSE 100 index also gained around 2.5%. "The market volatility has created conditions for a rebound," said Neil Birrell, Chief Investment Officer at Premier Miton Investors. "It is not surprising to see significant gains in the regions and industries most affected by the impact." The surge on Wednesday was amplified by a large number of short positions in the market and bearish positions held by systematic investors. Barclays strategist Emmanuel Cau said that with hedge funds and commodity trading advisors unwinding protective positions set against the risk of further escalation in the Iran conflict, the stock market could see a "strong short squeeze". "Cumulative technical fund/ hedge fund de-leveraging, April's seasonality, and the still robust economic background imply a risk of strong short squeeze and high beta rebound in equities," Cau wrote in a report. "Even if oil prices soar, the path of least resistance for equities may be higher." It is understood that since the outbreak of the Middle East conflict at the end of February, the STOXX 600 index in Europe has fallen by 6.8%, with little change since the beginning of the year. As of the time of writing, Brent crude oil futures prices fell below $100 per barrel during Wednesday's session, with a drop of up to 13.5%, falling to around $95; US WTI crude oil futures also saw their largest decline in nearly six years, falling to around $96. It is worth mentioning that, although the ceasefire has brought relief to the market, it does not meet Trump's demands to restrict Iran's nuclear program, missile or drone program, nor does it show America's readiness to meet Iran's desire for a permanent agreement and lifting of sanctions.