European stock markets experienced a significant rally on Wednesday, propelled by mounting optimism surrounding a potential peace agreement between the United States and Iran. Major indexes across the continent posted substantial gains as reports suggested a one-page memorandum of understanding is close, aiming to end conflict and establish a framework for future nuclear negotiations. This positive sentiment also boosted Asian markets and the euro, signaling a broader relief rally across global equities.
European equities closed sharply higher on Wednesday, buoyed by widespread optimism as reports indicated a significant breakthrough in U.S.-Iran diplomatic efforts towards a peace agreement. The prospect of an end to hostilities between the two nations ignited a broad-based rally across the continent.
The pan-European Stoxx 600 index surged by 2.3% by the close of trading. London's FTSE 100 rebounded strongly with a 2.2% gain, recouping losses from the previous day, while France's Cac 40 and Germany's Dax saw impressive rises of 2.9% and 2.2% respectively.
Almost all major stock exchanges and sectors, with the exception of oil and gas, participated in Wednesday’s upswing. The euro also strengthened, climbing 0.5% against the dollar to trade at 1.1751.
Confidence was fueled by sources close to the negotiations. Two U.S. officials and two other individuals briefed on the matter informed Axios that the White House believes it is nearing completion of a concise, 14-point memorandum of understanding. This document aims to conclude the existing conflict and lay the groundwork for more comprehensive nuclear discussions. Confirming the developments, a spokesperson for Iran’s foreign ministry told CNBC that Tehran is currently "evaluating" the 14-article peace proposal put forth by the U.S. administration.
This diplomatic progress follows President Donald Trump's recent decision to pause "Project Freedom," a U.S. initiative designed to "guide" ships through the strategically important Strait of Hormuz. In a post on Truth Social, Trump cited "the fact that Great Progress has been made toward a Complete and Final Agreement with Representatives of Iran" as the rationale behind his decision.
Adding to the diplomatic flurry, Iran's foreign minister, Abbas Araghchi, held a meeting with Chinese foreign minister Wang Yi in Beijing on Tuesday, according to state media. China has been a crucial player, with Trump's advisors urging Beijing to exert pressure on Iran to facilitate the reopening of the Strait of Hormuz, a critical global shipping artery for oil and gas.
Beyond Europe, Asian markets also reflected a buoyant mood overnight. South Korea's Kospi index soared by 6.5%, achieving a new all-time high above 7,000 points, building on an already remarkable gain of over 70% for the year.
Index titan Samsung Electronics reached an unprecedented valuation, with its shares climbing more than 14% to exceed $1 trillion in market capitalization. Fellow chipmaker SK Hynix also touched a new record, registering gains exceeding 10%.
In corporate news, pharmaceutical giant Novo Nordisk raised its annual profit guidance on Wednesday. The company's blockbuster weight-loss medications outperformed expectations in the first quarter of the year. Sales of Novo's oral weight loss drug, the Wegovy pill, in the U.S. alone reached 2.26 billion kroner, significantly surpassing analyst projections of 1.16 billion kroner. Novo Nordisk shares closed approximately 2% higher.
A video discussing the company's strategy, titled "Novo Nordisk CEO: Aim is to expand weight-loss market in U.S.," was also featured. The video thumbnail image can be seen here: 
Danish jeweler Pandora saw its shares jump by about 15% after reporting first-quarter sales that beat analyst forecasts, despite facing headwinds from soft consumer sentiment in the U.S. The company has grappled with pressure from the Trump administration's import tariffs and rising silver prices, which have squeezed profit margins. On Wednesday, Pandora announced its intention to apply for tariff reimbursement under the International Emergency Economic Powers Act in the U.S.
— CNBC Staff with contributions from Justina Lee.
