European and US Markets Rally on Diplomatic Hopes
Stock markets across Europe and the United States posted strong gains as investors reacted to signs of progress in diplomatic efforts to end the conflict between the United States and Iran. The prospect of renewed negotiations brought down oil prices and boosted technology and banking stocks.
Milan's Ftse Mib closed up 1.6% at 52,371 points, leading European bourses. Frankfurt rose 1.07%, Paris added 0.92% and London gained 0.75%. On Wall Street, the Dow Jones advanced 0.71% to 52,048.83 points while the technology-heavy Nasdaq jumped 2.26% to 27,122.09 points. The S&P 500 gained 1.49% to end at 7,764.70.
Oil and Gas Prices Fall Sharply
The price of crude oil dropped below $100 per barrel on expectations that diplomatic channels could reopen the Stretto di Hormuz, a critical transit route for global energy supplies.
US benchmark WTI fell 5.1% to $95.2 per barrel. Brent crude, the international benchmark, dropped 3.8% to $99.8. The decline came as US President Donald Trump signaled willingness to meet Iranian President Masoud Pezeshkian at the United Nations General Assembly in New York. Qatar is mediating between the two sides.
European natural gas prices also slumped. Dutch TTF futures, the regional benchmark, fell 7.6% to €73.5 per megawatt-hour, according to ANSA reports. Admiral Brad Cooper, head of the US Central Command, stated that oil and gas flows through Hormuz had reached six-month highs in the past two weeks.
The drop in energy prices fed through to European government bond markets, easing inflation concerns. The yield on Italy's ten-year BTP fell almost 12 basis points to 4.31%. The spread between Italian and German bonds narrowed by 4 points to 87 basis points.
Italian Banks Lead the Gains
Piazza Affari was the standout performer in Europe, led by banking stocks amid renewed speculation about consolidation in the sector.
Banco BPM shares rose 4.3% on press reports that Crédit Agricole and UniCredit are considering a joint initiative on the Milan-based lender. Crédit Agricole already holds a 29.3% stake in Banco BPM. UniCredit gained 3.2% after its shareholders approved changes to the board list.
Technoprobe, a semiconductor testing equipment maker, jumped 5.3%. The stock has risen more than 140% since the start of the year, driven by demand linked to artificial intelligence. Other technology names also advanced: STMicroelectronics added 3% and Prysmian rose 3%.
Energy stocks moved in the opposite direction, tracking the lower oil price. Eni, Italy's largest energy group, fell 1.1%.
The broader European banking sector added 1.5%, while technology stocks gained 2.6%. Utility shares were little changed.
Geopolitical Backdrop Drives Sentiment
The market moves reflected a broader shift in risk appetite as headlines from diplomatic talks between Washington and Beijing also turned positive. Investors are watching for a potential meeting between President Trump and Chinese President Xi Jinping.
Asian markets had closed earlier in positive territory, with Hong Kong up 0.67%, Shanghai gaining 0.71% and Seoul advancing 1.65%. Tokyo was closed for a holiday.
The return of risk appetite hurt traditional safe-haven assets. In addition to falling bond yields, gold prices slipped.
For Italian investors, the day underscored how sensitive local markets remain to energy prices and geopolitical developments. A sustained drop in oil and gas costs could ease pressure on household energy bills — a key driver of inflation in recent years — while lower bond yields reduce borrowing costs for the government.
