European markets bounced back on Wednesday after a sharp selloff in the previous session, while oil prices slipped as ceasefire talks between the U.S. and Iran remained stuck. The pan-European STOXX 600 gained 0.7%, with Germany’s DAX and Spain’s IBEX also moving higher.
Investors continue to watch tensions in the Middle East closely after U.S. President Donald Trump said he does not expect China’s help in ending the conflict with Iran ahead of his meeting with Chinese President Xi Jinping in Beijing. Despite ongoing diplomatic efforts, negotiations between Washington and Tehran remain at a standstill, while concerns over disruptions in the Strait of Hormuz continue to support oil prices.
In Asia, stocks recovered from early losses as renewed optimism around AI-related companies lifted sentiment. South Korean markets rebounded strongly after reports that the government could step in to prevent a major strike at Samsung Electronics. Analysts say strong AI-driven exports from countries like South Korea and Japan are helping offset concerns over rising energy costs.
Meanwhile, U.S. inflation came in hotter than expected in April, raising concerns that the Federal Reserve may keep interest rates elevated for longer. Traders are now increasingly pricing in the possibility of a rate hike later this year as higher oil prices continue to push inflation upward.
Oil prices eased slightly on Wednesday after a three-day rally, with Brent crude falling around 1.4% to near $106 per barrel. However, analysts warn that the market remains highly sensitive to developments in the Middle East, and further escalation could quickly send prices higher again.
France also confirmed stronger inflation data, with consumer prices rising 2.5% in April — the country’s highest inflation reading since July 2024.
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