European Stocks Rebound as Israel and Iran Halt Attacks

European stock markets rebounded on Tuesday following a ceasefire agreement between Israel and Iran. The de-escalation followed a period of volatility on Monday, when an exchange of missile strikes between the two nations drove Brent crude futures above $97 per barrel and pushed Eurozone government bond yields to multi-week highs.

As hopes for peace negotiations grew, Brent crude futures fell below $93 a barrel and the U.S. dollar declined. Market gains were led by banking stocks, specifically Intesa Sanpaolo and Banco BPM, both of which issued buyout proposals for Monte dei Paschi di Siena. Positive sentiment was further supported by reports of rapid expansion in Chinese trade data and an unexpected rise in German industrial output and exports, reversing a previous trend where German factory orders had fallen 3.8 percent in April.

In the corporate sector, GSK shares declined after the company agreed to acquire U.S.-based Nuvalent for $10.6 billion to expand its lung cancer portfolio. This recovery followed a Monday slump driven by strong U.S. employment data and expectations that the Federal Reserve would hike interest rates.