US and Iran agreed to a two‑week ceasefire, pausing a six‑week conflict that had disrupted oil supplies and heightened market volatility.
Barclays says the ceasefire removes severe downside risks, opening potential short‑term rally in European equities driven by hedge fund repositioning.
The bank warns rising oil prices could still curb earnings growth, estimating European 2026 earnings growth at ~6% if oil stays around $85 per barrel.
Higher oil prices may tighten financial conditions and inflation, but lower oil intensity, fiscal support and AI investment could cushion the slowdown.