"This is significant because Lebanon was a potential major sticking point in connection with the ceasefire," Deutsche Bank analysts wrote in a note. Israel had jeopardized the truce agreed between Iran and the US with its heaviest attacks on Lebanon since the start of the war. "This hope for a de-escalation in Lebanon helped to dispel fears that the broader ceasefire could fail ahead of this weekend's talks."
According to strategists, markets could nevertheless remain volatile. As long as the US and Iran insist on their maximalist demands, there is no sign of a detente, said Robert Greil, chief strategist at Merck Finck. "However, the pressure on the Trump administration to end the war is immense, if only because of the midterm elections in the fall."
STEEP RISE IN INFLATION LIKELY TO WEIGH ON MARKETS
Aside from the geopolitical situation, the expected inflation data from the US is likely to set the tone. Experts anticipate an increased rate in March given the impact of the war. Should the rise turn out to be stronger than expected, it would intensify discussions about central bank interest rate hikes and thus also weigh on equity markets, said portfolio manager Thomas Altmann of asset manager QC Partners.
Spot gold eased 0.2 percent to 4,752.67 dollars in the run-up. Since the start of the Iran war at the end of February, the price of the precious metal has fallen by around ten percent. Sharply rising energy prices fueled inflation fears and speculation of higher US interest rates.
Meanwhile, concerns about further disruptions to oil supplies in the Middle East pushed prices for Brent North Sea crude and US WTI up by 0.6 percent each to 96.47 and 98.52 dollars per barrel (159 liters). All eyes remain firmly fixed on tanker flows in the Strait of Hormuz for signs of increased activity, said IG market analyst Tony Sycamore. So far this week, both contracts have lost eleven percent in value, the largest weekly decline since June 2025. On Tuesday, President Trump had declared his approval of a two-week ceasefire with Iran, conditional on the reopening of the Strait of Hormuz.
DEFENSE SECTOR FALLS - OUTLOOK PRESSURES SODEXO
Defense stocks were dumped from portfolios. The European sector index lost around one percent. "The bitter logic of the stock market: ceasefires are pure poison for defense contractors," said Frank Sohlleder, analyst at ActivTrades. Rheinmetall shares held the red lantern in the Dax, diving 5.8 percent. The stock has been struggling in vain to resume its upward trend since October last year, Sohlleder said. Hensoldt shares were the biggest MDax losers, down 5.2 percent. Renk shares fell 4.3 percent.
Shares of the French catering and services group Sodexo collapsed by more than ten percent in the face of disappointing business performance. "Sodexo reported a very weak first-half result, even compared to already lowered expectations," said analysts at JP Morgan. The profit warning for 2026 looks "even more concerning."
(Report by Anika Ross, edited by Elke Ahlswede. For inquiries, please contact our editorial office at berlin.newsroom@thomsonreuters.com (for politics and economics) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)
