European stocks advanced for a fourth straight week on growing optimism that the Middle East conflict may be nearing an end after Iran said the Strait of Hormuz had reopened.
The Stoxx Europe 600 Index gained 1.6% at the close. Most sectors gained, led by travel and leisure shares as airline stocks rallied. Energy shares dropped the most in a year, dragged down by industry heavyweights Shell Plc and BP Plc. Telecoms also fell as Sweden's Ericsson AB slid 4.1% on weak first-quarter results.
Iranian Foreign Minister Abbas Araghchi's declaration the Strait of Hormuz was "completely open" for all commercial vessels during the ceasefire. President Donald Trump later echoed Araghchi's comments in a Truth Social post but said the US naval blockade will remain in full force. Brent crude traded at $93 per barrel.
The European benchmark is close to recouping losses since the conflict began, while investors are watching how companies communicate the impact of higher energy prices in results.
"Now that the dust appears to be settling on events in the Middle East, market attention will once again focus back on the fundamentals, in particular earnings given that the season has just started," said Daniel Murray, deputy chief investment officer at EFG Asset Management.
Still, strategists surveyedBloomberg Terminal by Bloomberg see little upside left for Europe this year, expecting earnings downgrades and geopolitics to cap gains. The Stoxx Europe 600 Index will finish 2026 about 1% above Wednesday's close, at 623 points, according to the average of 17 forecasts.
European equity funds also suffered their largest weekly outflows since Nov. 2024, according to Bank of America Corp. report that cited EPFR Global data.
In other individual stocks, Alstom SA plunged 27%, the most since 2023, after the French train manufacturer scrapped its full-year guidance, citing slow progress on key projects for railway rolling stock. Delivery Hero SE rose 5.2% after Uber Technologies Inc. increased its stake in its European rival.
Soitec SA, a French semiconductor materials maker, gained 14%. The stock has surged to the top of Europe's 2026 equity rankings with a more than 300% rally this year. It's benefiting from a frenzy in the fast-growing field of photonics, which uses light to transmit data.