Europe close: Stoxx 600 hits record high on hopes of US-Iran deal

4th Aug 2026 17:00

(Sharecast News) - Europe's benchmark Stoxx 600 index rose to a record close on Tuesday as global stock markets raced higher on optimism that a deal to fully reopen the Strait of Hormuz was imminent.

The Stoxx 600 finished 0.7% higher at 656.86, topping its previous record close reached in early July, helped by all-time peaks in Frankfurt and Paris. Wall Street was also getting in on the act, with the Dow and S&P 500 both in record territory.

Oil prices dropped sharply, with Brent crude falling over 5% to below the $80-a-barrel mark for the first time in four weeks, after US Treasury Secretary Bessent claimed in an interview with CNBC that a final deal between the US and Iran to reopen the Strait of Hormuz could be reached as early as Wednesday.

However, subsequent reports of a commercial vessel being struck by a projectile offshore Oman raised fears that obstacles likely still remained between Washington and Tehran.

"Stocks continue to gain on hopes that some kind of deal on Hormuz will be announced soon. Given how often this has been declared, you might think that everyone was tiring of the pantomime, but with the Dow, Dax and others at record highs and recent laggards like the Dax and Nikkei rebounding too it appears that Trump is managing to avoid a major crisis in the global economy," said Chris Beauchamp, chief market analyst at IG.

"Oil prices are down too, which is always good for generating upside in equities panicked by signs that inflation is picking up again."

Bayer climbed after reporting a surprise jump in quarterly earnings at the German conglomerate. In an earnings call with reporters, Bayer boss Bill Anderson also ruled out a breakup of the group, saying there is more work to be done before discussions can be had.

German airline Deutsche Lufthansa sank 8% after reporting a sharp drop in second‑quarter profits and cutting its full‑year guidance, as volatile jet‑fuel prices and geopolitical disruption continued to weigh on continental carriers.

Meanwhile, shares in German online fashion retailer Zalando dropped over 13% after second-quarter results and full-year guidance disappointed investors. The firm said gross merchandise volume and revenue growth for the full financial year would likely be in the lower half of its previous 12-17% range.