European stocks jump to two-week highs as Iran-U.S. peace hopes lift sentiment in Stock News 12/06/2026 European stocks opened sharply higher on Friday after markets received their clearest signal yet that a potential peace agreement between Iran and the United States may be within reach. The pan-European STOXX 600 jumped 1% to a two-week high and poised for its best day in over two weeks. Germany’s DAX vaulted 1.5%, while France’s CAC 40 gained 1.2%. London’s FTSE 100 advanced 0.8%, while Italy’s FTSE MIB gained 1.2% to hit a fresh record peak. Airline stocks took off on the back of lower crude prices. Air France KLM SA (EPA:AIRF) rose 5.8%, while British Airways owner International Consolidated Airlines Group S.A. (BME:ICAG) gained 4.5%. Wizz Air Holdings PLC (LON:WIZZ) and Deutsche Lufthansa AG (ETR:LHAG) gained 6% and 4.6% respectively. Crude sank to two-month lows after President Donald Trump touted that a historic peace deal could be signed in Europe as early as this weekend – the biggest tangible evidence yet of a diplomatic breakthrough. The news sent cash markets rallying across the board. Yet, in the backdrop of this euphoria, Iran has continued to attack ships in the Strait of Hormuz, keeping risk sentiment in check. This relief rally collides with the European Central Bank which just the day before, weaponized interest rates for the first time in nearly three years to combat war-driven inflation. It caps off a whip-saw week for European equities. Investors have been forced to simultaneously digest a blowout U.S. jobs report, ECB’s hawkish pivot, and whiplash headlines from the Middle East, all while trying to map out the Federal Reserve’s next move. Reflecting this chaos, the STOXX 600 – highly sensitive to Middle Eastern tension due to the Eurozone’s heavy reliance on energy imports – flirted with a 0.2% weekly loss, though the day’s late-stage rally could still pull it into the green. “The global economy faces a complex set of supply shocks but markets