European equities surged in early trading on Wednesday while Brent crude futures fell back under the $100-a-barrel mark after President Donald Trump told reporters the United States would be exiting the war in Iran within two to three weeks.
By 03:17 ET (07:17 GMT), the pan-European Stoxx 600 had climbed 2.3%, Germany's Dax had risen 2.8%, France's CAC 40 was up 2.2%, and the U.K.'s FTSE 100 had increased 1.8%.
Speaking to reporters in the Oval Office on Tuesday, Trump said the U.S. will be "leaving very soon," and added that the White House goal of eradicating Iran's nuclear threat had been "attained." He said Washington did not need a formal deal to conclude a conflict it started in conjunction with Israel more than a month ago, and he argued it will take "15-20 years" for Tehran to rebuild "what we’ve done to them."
The president's remarks followed a statement from Defense Secretary Pete Hegseth, who said in a press briefing that the next few days of fighting would be "decisive."
In parallel, reporting has indicated the United Arab Emirates is preparing to assist the U.S. and other allies in unblocking the Strait of Hormuz by force after Iranian attacks struck facilities in the Persian Gulf nation. Citing Arab officials, the Wall Street Journal said the UAE has been pushing for a resolution at the United Nations Security Council that would authorize such action.
Drone and missile strikes on tankers by Iran have effectively closed the Strait of Hormuz for weeks, disrupting flows and elevating energy prices. Those strikes have heightened concerns about a potential rise in inflationary pressures globally, given the channel's importance for oil shipments. Trump has not provided a detailed update on U.S. plans for the strait, but he has urged allies to "just take" control of the vital waterway, through which roughly a fifth of the world's oil flows.
On the oil benchmark front, futures for June-delivery Brent crude fell 5.0% to $98.81 a barrel. Brent had surged to nearly $120 a barrel after the outbreak of the conflict in the Middle East, compared with roughly $70 a barrel before the fighting began in late February.
The early market response paired a pickup in risk appetite across European equity markets with a retreat in energy prices that had been pushed higher by disruptions to tanker traffic. Investors are weighing public statements from U.S. officials alongside reports of potential military measures to secure maritime routes, creating a complex backdrop for both equity and commodity markets.
Given the continued flow of statements from senior U.S. officials and reporting on allied plans, market participants will likely continue to monitor developments closely in coming days for further signals on both the duration of U.S. involvement and the prospects for stabilizing oil shipments through the Strait of Hormuz.