European stock markets are anticipated to open significantly higher on Wednesday after the United States and Iran reached a conditional ceasefire agreement. Data from IG indicates that the UK's FTSE 100 is projected to open 3% higher, Germany's DAX index is set to rise 5%, France's CAC 40 is expected to gain 4.5%, and Italy's FTSE MIB is forecast to jump 5.3%.

US President Donald Trump announced late Tuesday that he had agreed to suspend planned strikes on Iranian infrastructure for a two-week period. This news prompted a surge in global markets overnight and triggered a sharp decline in oil prices. In a post on Truth Social, President Trump stated that the move was "contingent on the Islamic Republic of Iran agreeing to a full, immediate, and safe opening of the Strait of Hormuz."

Representing Iran's Supreme National Security Council, Foreign Minister Araghchi posted on the X platform that Tehran's armed forces would "cease defensive operations." The ceasefire announcement led to broad gains across Asia-Pacific markets overnight and a strong advance in US stock index futures. Following the agreement's disclosure, oil prices also plunged below $100 per barrel. This development came after President Trump had previously threatened to order the destruction of Iran's "entire civilization" if it did not reopen the Strait of Hormuz.

However, multiple Middle Eastern countries reported incoming missiles and drones from Iran on Wednesday, leading to the activation of air defense systems across several Gulf states. Corporate earnings from Shell are scheduled for release on Wednesday, while key economic data includes German factory orders and EU retail sales figures.