European stocks open higher as U.S. moves to reassure markets

Investing.com - European stocks opened higher on Friday, rebounding from losses in the prior session, as investors assessed moderating oil prices amid an intensifying conflict in the Middle East.

By 04:00 ET (08:00 GMT), the pan-European Stoxx 600 had risen by 0.7%, the Dax in Germany had climbed 1.0%, the CAC 40 in France had increased by 0.8%, and the FTSE 100 in the U.K. had advanced 0.4%.

On Thursday, shares in the continent tumbled to their lowest level since December, dragged down by a rocketing in natural gas prices following an escalation in attacks in on energy infrastructure sites throughout the Middle East earlier this week.

Much of the focus revolved around an attack which the U.S. claimed Israel carried out on South Pars, the Iranian sector of the world’s largest natural gas deposit. Tehran responded with strikes of its own on various gas production sites around the Middle East, particularly a key facility in Qatar.

Europe heavily imports natural gas from Qatar, leaving exposed to a widening of the fighting. Dutch TTF natural gas prices, the European benchmark, rose by roughly 25% at one point, but later pared back some of that advance.

The European Central Bank also warned that the longer the conflict between Iran and the joint forces of the U.S. and Israel goes on for, the more upward pressure could be placed on inflation.

Policymakers at the ECB kept interest rates steady, mirroring moves by other central banks around the world, but lifted their inflation expectations substantially for 2026, citing the projected impact of the Iran war.

With the prospect of reigniting inflation looming, analysts at Capital Economics suggested that the ECB could opt to consider interest rate hikes in the coming months. Elsewhere, the predicted timeline for rate cuts by the Federal Reserve were pushed back, as the U.S. also grappled with fallout from the assault on Iran.

As jittery investors inch toward the end of a volatile week, President Donald Trump on Thursday attempted to bring a measure of calm to markets.

Trump vowed to do whatever was necessary to help the crisis cool, and attempted to reassure Americans that “it will be over with soon.”

Faced with the prospect of higher borrowing costs in Europe, the U.S., and elsewhere, investors have piled into the U.S. dollar, denting the appeal of non-yielding gold despite bullion’s typical status as a safe haven during times of crisis.

A retreat in gold prices hit miners in Europe in particular on Thursday, with the sector dropping by 4.2%.