The move came amid growing expectations that the confrontation with Iran could be heading toward a conclusion. U.S. President Donald Trump and Secretary of State Marco Rubio suggested that the end of the war could be near, while Washington signaled the possibility of both direct contacts with the leadership in Tehran and a de-escalation even in the absence of a formal agreement.
Specifically, Trump stated that the United States could halt its military strikes against Iran within two to three weeks and that Tehran did not need to reach a deal as a prerequisite for the conflict to lose intensity. The U.S. president is scheduled to provide an update on Iran in a televised address to the nation at 9 p.m. on Wednesday (0100 GMT Thursday).
"Signals regarding the military campaign are shifting toward a relatively imminent conclusion and the destruction of all Iranian military assets and oil facilities (including Kharg Island) to weaken the regime (the Revolutionary Guard, which sustains it and is funded by oil exports) and thus cause it to collapse or leave it severely crippled from within. If there are no boots on the ground, we return to a viable military outcome without elevated risks," Bankinter analysts noted in their morning report.
Beyond the geopolitical front, markets continued to gauge potential interest rate moves this year. Fears of an inflationary spike—driven by rising energy costs resulting from the war against Iran—had led to increased expectations of monetary tightening among major central banks, though a de-escalation could reverse that dynamic.
In this regard, Federal Reserve Chair Jerome Powell said on Monday that the U.S. central bank can afford to wait and see how the war with Iran affects the economy and inflation, reminding markets that policymakers typically "look through" turbulence such as that caused by rising oil prices.
"Powell's comments are very helpful because they reduce the visceral (non-rational) fear of inflation and rates, as a simplistic narrative had taken hold. This is not a total turnaround for the better, but it is an improved outlook, less reckless in geostrategic terms," Bankinter added.
On the macroeconomic front, final March PMI data for Europe will be released on Wednesday, providing clues on how the Middle East conflict has been impacting the economy. In Spain, the manufacturing sector contracted in March at its fastest pace since April 2025, according to the PMI.
At 0705 GMT on Wednesday, the Spanish benchmark IBEX 35 was up 506.20 points, or 2.97%, at 17,555.80 points, after falling 7.1% in March, its largest decline since June 2022.
Meanwhile, the pan-European FTSE Eurofirst 300 index advanced 2.26%.
In the banking sector, Santander rose 5.27%, BBVA gained 3.75%, Caixabank advanced 3.69%, Sabadell climbed 4.04%, Bankinter appreciated by 3.18%, and Unicaja Banco rose 3.41%.
Among large-cap non-financial stocks, Telefónica gained 0.84%, Inditex advanced 2.60%, Iberdrola rose 1.44%, and Cellnex climbed 1.91%. Oil major Repsol stood out on the downside, losing 3.98% as crude prices retreated.
(Reporting by Tomás Cobos; editing by Benjamín Mejías Valencia)
