European share indexes ended a four-day losing streak on June 11, rising about 0.5% to 0.7%, led by strong gains in energy and technology stocks [1, 2]. The rebound followed the European Central Bank’s decision to raise interest rates by 25 basis points, its first hike in nearly three years, aiming to address inflation pressures driven by high energy prices linked to Middle East risks [1, 3, 2, 4, 5].
The Euro Stoxx 600 index recovered to close at 622.46 points, up from 618.17 points on June 10 when it had fallen amid escalating US-Iran tensions [2, 5]. Despite the rebound, investors remained cautious as rhetoric and military flare-ups between the US and Iran fueled uncertainty. US President Donald Trump declared the US would hit Iran "VERY HARD TONIGHT" and threatened seizure of Iran’s oil infrastructure, contributing to the tension [1, 2, 5]. Trump also stated, "We hit them hard yesterday and we're going to hit them hard again today" [5].
Oil prices fluctuated between roughly $93 and $98 per barrel during early June, reflecting the geopolitical volatility in the Middle East [1, 3, 4, 5]. Energy shares rose as markets priced in the risks of supply disruptions. Meanwhile, technology stocks were volatile, with semiconductor shares gaining on optimism about artificial intelligence while some software stocks declined [3, 2].
Germany’s economy showed signs of strain, with forecasts pointing to a technical recession in 2026. The downturn is linked to energy price shocks tied to the Middle East conflict [3, 4, 5]. The German DAX index closed at 24,195.31 points on June 10 amid these challenges [5].
Market observers said the ECB’s rate hike was necessary despite growth risks. Carsten Brzeski, global head of macro at ING, said it's "not a rate hike that will derail the eurozone economy," adding that the risk of inaction is greater than potential growth impacts from higher rates [2]. Luca Bindelli of Lombard Odier described current tensions as "sporadic fire exchange rather than a broadening or restart of the wider conflict" [3].
On June 8, European stocks closed mixed, with the Stoxx Europe 600 slightly down and Brent crude peaking near $98 per barrel before easing after a halt in Middle East military operations [4]. By June 10, shares were down for a fourth day due to rising US-Iran tensions [3, 5]. The ECB’s June 11 rate hike reversed this slide.
Markets will continue watching developments in US-Iran relations and the ECB’s next policy steps as inflation and energy price dynamics evolve.
