BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks look set to open with a gap up on Wednesday after the U.S. and Iran agreed to a two-week ceasefire to ensure stability in the region's critical energy corridor.
U.S. President Donald Trump touted the breakthrough as a major victory for international diplomacy, asserting that Iran has signaled a readiness for lasting stability after a volatile and prolonged standoff.
In a post on Truth Social, Trump wrote, 'A big day for World Peace! Iran wants it to happen, they've had enough! Likewise, so has everyone else!'
The Pakistan-brokered last-minute ceasefire deal has opened the way to getting shipping on the move in the Strait of Hormuz, but both Iran and Oman can levy transit fees on ships traversing the waterway.
The ceasefire calls for Israel and Hezbollah to halt fighting in Lebanon. Trump said he was holding off on his threatened attacks on Iranian bridges and power plants, adding a 10-point proposal received from Iran is a workable basis on which to negotiate. That said, there is confusion over nuclear enrichment language.
Iran's Supreme National Security Council said negotiations with U.S. representatives will begin in Islamabad on Friday and could last up to 15 days.
Asian markets were sharply higher, with benchmark indexes in Australia, Hong Kong, Japan and South Korea surging 3-7 percent.
Gold prices hit a three-week high above $4,800 an ounce as the dollar weakened significantly against major currencies following Trump's ceasefire move.
Brent crude prices sank 14 percent to $94 a barrel and WTI crude futures were down nearly 15 percent below $97 a barrel on easing supply fears.
The day's economic calendar remains light, with factory orders and construction Purchasing Managers' survey results from Germany likely to garner some attention later in the day.
U.S. stocks reversed losses to end narrowly mixed overnight amid ceasefire hopes after Pakistani Prime Minister Shehbaz Sharif urged President Trump to extend his deadline for Iran to reopen the Strait of Hormuz by two weeks to 'allow diplomacy to run its course.'
Adding to hopes of a diplomatic breakthrough, the White House told Axios that Trump is 'aware' of Pakistan's two-week Iran cease-fire proposal and that 'a response will come.'
Earlier in the day, Trump threatened that a 'whole civilization will die tonight' if Iran fails to meet his latest deadline to strike a deal. Hours before the ceasefire deadline, Iran's key oil export hub, was hit by multiple strikes.
In economic news, short-term inflation expectations for U.S. consumers rose to 3.4 percent in March, while households grew more pessimistic about their financial situations, a New York Fed survey revealed.
The tech-heavy Nasdaq Composite and the S&P 500 both edged up by 0.1 percent while the Dow dipped 0.2 percent.
European stocks ended deep in the red on Tuesday as traders returned to their desks after Good Friday and Easter holidays.
The pan-European Stoxx Europe 600 fell 1 percent. The German DAX tumbled 1.1 percent, France's CAC 40 shed 0.7 percent and the U.K.'s FTSE 100 gave up 0.8 percent.
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