Shortly before 10:30 a.m., the Paris CAC 40 is soaring 2.3% toward 8,387 points, in line with gains posted by the Euro Stoxx 50, while Frankfurt's DAX 40 climbs 2.1% and London's FTSE 100 lags slightly with a 1.3% advance.

Sentiment lifted by hopes for 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 U.S. 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 finalized.

"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 looming SpaceX IPO

Beyond this geopolitical clearing, 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 nearing $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 manager points out.

"By way of 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 allows European markets to continue the favorable momentum from the previous day, having absorbed without much difficulty the monetary tightening decided by the ECB (+25 basis points across the three key rates), a decision that was widely anticipated.

"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 flexibility runs counter to market expectations for two further rate hikes by the end of the year."

"By further describing its monetary stance as 'well-positioned,' the ECB may 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 in focus...

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.

Additionally, Maurel & Prom and Mersen will join the SBF 120, at the expense of Elior Group and Nexity. These various changes within the Paris indices will take effect on Friday, June 19, after the market close.

Among the top performers in 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.