European stocks are set to open sharply higher Wednesday, with futures indicating gains of over 1%, after Washington and Tehran agreed to a ceasefire framework, signaling a potential end to the month-long conflict in the Middle East.
"Until the uncertainty clears up and we get some kind of direction, things will be highly volatile with a lot of back and forth as we've seen the last couple of weeks," said Michael Dehal, senior portfolio manager at Dehal Investment Partners, Raymond James.
The risk-on mood was evident across assets, with gold prices falling 0.8% as investors shed safe havens. In Canada, the S&P/TSX Composite Index was largely flat at 33,121.29 in the previous session's trading, though financial shares, the benchmark's heaviest weighting, rose 0.3%. The energy subindex, however, remained down 0.2% despite a recovery in oil prices.
The Pakistan-brokered framework proposes an immediate ceasefire followed by talks on a broader peace settlement. The potential de-escalation eases fears of a wider conflict that could disrupt global trade and energy supplies. Investors are now awaiting a press conference from U.S. President Donald Trump at 1 p.m. ET for further details.
However, caution persists after a senior Iranian official stated that Tehran would not reopen the vital Strait of Hormuz under a temporary arrangement, suggesting the path to a permanent resolution remains complex.
This article is for informational purposes only and does not constitute investment advice.
