LONDON, March 25 - European stocks climbed and oil prices dropped Wednesday after reports emerged that the U.S. proposed a month-long ceasefire with Iran, though Tehran denied engaging in direct talks.
President Donald Trump claimed progress in ending the conflict, fueling hopes that Gulf oil exports could resume. Traders reacted positively to word of a U.S. 15-point negotiation plan, even as an Iranian military spokesman dismissed it as "negotiating with itself."
The pan-European STOXX 600 rose 1.2%, while London’s FTSE 100 gained 1.1%. Wall Street futures pointed higher, with S&P 500 e-minis up 0.8%.
"The market is trading the idea that peace talks or a ceasefire could be on the way," said Amelie Derambure, senior multi-asset manager at Amundi, noting traders are positioning for a potential relief rally-but stressed more concrete developments are needed for sustained gains.
A senior Iranian official confirmed Pakistan delivered the U.S. proposal, suggesting either Pakistan or Turkey could host de-escalation talks.
Brent crude fell 4.1% to $100.25 a barrel; WTI dropped 3.7% to $88.91. Iran offered conditional passage through the Strait of Hormuz for “non-hostile vessels,” but the critical energy corridor remains effectively closed.
European bond yields declined, led by Italy, due to its heavy reliance on fossil fuel imports. German business morale slumped in March, threatening Europe’s largest economy.
Gold rose as lower oil prices eased inflation concerns. The war has triggered the worst energy shock in history, killed thousands, and prompted Gulf states to warn the U.N. of an existential threat from Iran.
BlackRock CEO Larry Fink warned oil could hit $150 a barrel, risking global recession.