European stock markets opened sharply lower on Wednesday, and oil prices surged more than 6%, after US President Donald Trump declared the interim ceasefire with Iran effectively dead. Speaking at the NATO summit in Ankara, Trump told reporters, according to Reuters, that the memorandum of understanding with Iran was over: “To me, I think it's over. I don't want to deal with them.”
The announcement came hours after US Central Command said its forces had struck over 80 targets in Iran overnight, including command-and-control networks, coastal radar installations, anti-ship missile capabilities, and vessels operated by the Islamic Revolutionary Guard Corps (IRGC). Washington also revoked a waiver that had permitted Iran to resume oil exports, further tightening supply expectations.
Brent crude, the international benchmark, rose more than 6% by 10:45 CEST to $78.79 a barrel, while US benchmark crude climbed 6.3% to $74.88 a barrel. Both had recently fallen to levels seen before the conflict with Iran began in late February. The renewed hostilities, despite earlier commitments to seek a peaceful resolution, have injected fresh uncertainty into oil markets that had already been volatile.
European indices slide amid geopolitical jitters
In European trading, Germany's DAX shed more than 2.2% by 11:00 CEST, while France's CAC 40 fell over 2%, and London's FTSE 100 lost 1.5%. US stock futures were also down about 1% at the same time. The declines were broad-based, with technology shares particularly under pressure.
“Geopolitical headlines will likely determine market sentiment over the coming hours. A further deterioration in the situation could weigh further on equity valuations along with rising stress in technology,” noted Ipek Ozkardeskaya of Swissquote in a commentary.
The sell-off extended to Asia, where Tokyo's Nikkei 225 lost 2.1% to 66,819.05, and South Korea's Kospi tumbled 5.4% to 7,246.79. The Kospi had briefly surpassed the 9,000 level last month before succumbing to heavy selling in AI-related technology shares such as Samsung Electronics and SK Hynix. Samsung fell 6.3% early Wednesday after dropping about 7% the day before, while SK Hynix reversed early gains to fall 5.7%.
In contrast, Hong Kong's Hang Seng rose 3% to 24,193.56, and Taiwan's Taiex edged up 0.6%. Shares in Chinese AI start-up Zhipu, also known as Z.ai and traded as Knowledge Atlas Technology, jumped nearly 14%. The Shanghai Composite index declined 0.5% to 3,970.88.
On Tuesday, the roller-coaster ride for AI stocks turned lower again, dragging Wall Street down. The S&P 500 fell 0.4%, though the majority of stocks within the index rose. Losses among AI-related stocks dragged the Nasdaq Composite 1.2% lower, while the Dow Jones Industrial Average fell 0.2%. Advanced Micro Devices sank 6.5%, Intel shed 9.7%, and Micron Technology lost 4.7%. SpaceX, which owns the xAI business, fell 6.8% on its first day of trading in the Nasdaq-100 index. Rivian Automotive dropped 18.1% after announcing a share dilution plan.
The latest geopolitical shock adds to existing concerns that the frenzy around artificial intelligence shares has pushed valuations beyond the productivity gains and profits likely to result from massive investments in chip production capacity and data centres. The combination of oil price spikes and tech sector volatility is testing investor confidence across global markets.
In currency markets early Wednesday, the US dollar rose to 162.26 Japanese yen from 162.11 yen, while the euro climbed to $1.1426 from $1.1414.
