European equities rebounded on Tuesday after Washington’s threatened sanctions against Iran failed to materialize, easing geopolitical pressure on energy markets and risk assets.
The Stoxx Europe 600 Index climbed 0.4% by midday, with Germany’s DAX leading regional gains at 0.68%, while France’s CAC 40 and the UK’s FTSE 100 advanced 0.4% and 0.29%, respectively. The rebound followed a day of cautious trading as investors braced for potential disruptions from the U.S. administration’s announcement of a new economic package targeting Tehran.
Brent crude futures fell over 2% overnight but stabilized around $91.50 a barrel, with live data showing a 3.64% decline to $87.24. The easing of oil price volatility reduced pressure on European energy-sensitive sectors, contributing to the broader market recovery.
Germany’s Q2 GDP growth exceeded expectations, expanding 1.0% year-over-year and 0.3% sequentially, according to Destatis. The acceleration from 0.7% in the prior quarter topped preliminary forecasts of 0.9% and 0.2%, respectively, signaling resilience in Europe’s largest economy. Exports rose 2.0% quarter-on-quarter, driven by chemicals, electronics, and transport equipment.
In corporate news, Chesnara gained nearly 5% after reporting stronger capital generation, while Vistry surged 10%—tracking data showed a 16.31% rise—following its announcement of a £350 million funding program for social and affordable housing under government support.
Sovereign bond yields eased, with Germany’s 10-year Bund yield declining toward 3.23%, as the U.S. Treasury hinted at tapping its cash balance to finance an expanded debt buyback program. The move reduced the net supply of short-term bills, easing pressure on global debt markets ahead of Federal Reserve Chair Kevin Warsh’s address at Jackson Hole on Friday.
