Shortly before 10:30 a.m., the Paris CAC 40 is posting a 2.3% surge to around 8,387 points, in line with gains seen on the Euro Stoxx 50, while Frankfurt's DAX 40 is climbing 2.1% and London's FTSE 100 is trailing with a 1.3% advance.

Sentiment lifted by hopes of a Middle East deal...

On Thursday evening, Donald Trump stated that he had decided to cancel planned new strikes against Iran, citing the finalization of several points of agreement and the imminent signing of a peace protocol, thereby restoring investor confidence.

Later, the US President specified that the agreement between the United States and Iran could be signed this weekend in Europe, and that the Strait of Hormuz would be reopened to navigation once the deal is inked.

"The market reaction to this news was swift, with a 2.92% drop yesterday to $90.38 per barrel, followed by an overnight decline of 1.75% to $88.80 per barrel," Deutsche Bank highlighted this morning.

...and by the forthcoming IPO of SpaceX

Beyond this clearing on the geopolitical front, the renewed optimism is fueled by the promise of a blockbuster market debut for SpaceX, which is shaping up to be the largest IPO in history with a valuation approaching $1,750bn.

"The market is pricing in extreme optimism regarding future growth," warns Ben Ritchie, head of developed market equities at Aberdeen. "Based on current figures, this translates into a revenue multiple close to triple digits," the fund manager points out.

"For comparison, Nvidia trades at approximately 20 to 25 times its revenue, while mature giants like Apple sit closer to 10 times. This places SpaceX not just at a valuation premium, but in an entirely different orbit," he notes.

ECB monetary tightening well digested

This backdrop enables European markets to continue the favorable momentum from the previous day, having absorbed the monetary tightening decided by the ECB (+25 basis points across the three key rates) without much difficulty, with this decision largely expected.

"Short-term market rate expectations rose slightly following the ECB decision," notes Felix Feather, economist at Aberdeen Investments, who believes that upward revisions to inflation forecasts likely explain this reaction.

However, he interprets the ECB's communication as relatively dovish, emphasizing that "the focus on preserving its flexibility runs counter to market expectations that are pricing in two further rate hikes by the end of the year."

"By further describing its monetary stance as 'well-positioned,' the ECB could be suggesting that it is not preparing for further monetary tightening at this stage," adds Felix Feather, who continues to anticipate no further rate hikes this year.

Corporate news highlights...

On the corporate front in Paris, the slump in oil prices (-3% to $86.4 per barrel of Brent) naturally benefits Air France-KLM (+8.1%), leading the SBF 120, while conversely penalizing TotalEnergies (-3.8%), the laggard of the CAC 40.

Furthermore, following its quarterly review of the CAC 40 index family, Euronext announced the inclusion of Abivax, Ipsen, and Soitec within its CAC Next 20 and CAC Large 60 indices, replacing ADP, Gecina, and Valeo.

In addition, Maurel & Prom and Mersen will join the SBF 120, while Elior Group and Nexity will be removed from the index. These various changes within the Paris indices will take effect after the market closes on Friday June 19.

Amongst top performers on the Euro Stoxx 50, Adyen is gaining 5% in Amsterdam, following the fintech's announcement of a definitive agreement to acquire the enterprise billing platform Orb for a total consideration of $335m.