European equities are set for a higher open on Wednesday as investors reacted to signals that the U.S. is actively pursuing diplomatic channels to ease tensions with Iran. According to IG data, the U.K.’s FTSE 100 is projected to rise 0.7%, Germany’s DAX by 1.16%, France’s CAC 40 by 0.9%, and Italy’s FTSE MIB by 1.3%.

U.S. President Donald Trump indicated on Tuesday that talks with Iran are underway, stepping back from previous threats to target Iranian energy infrastructure. “We’re in negotiations right now,” Trump said from the Oval Office, emphasizing that discussions were proceeding sensibly. Reports from The New York Times suggested that the U.S. had delivered a 15-point plan to Tehran aimed at ending hostilities, though Iran continues to deny formal negotiations are occurring.

Market reactions were swift. Gold prices climbed modestly, reflecting lingering geopolitical uncertainty, while oil prices dipped following the report of potential diplomatic progress. Asia-Pacific markets traded higher overnight, and U.S. futures indicated a positive open for Wall Street.

Corporate earnings in Europe on Wednesday include Commerzbank, Fresenius, and ENBW, offering investors fresh insights into the health of key sectors. Economic data releases, such as the U.K.’s February inflation figures and Germany’s Ifo business climate survey, are also likely to influence trading sentiment. Analysts note that these developments could drive increased volatility, particularly in energy and financial stocks, as markets weigh the impact of potential de-escalation on global trade and commodity prices.

Overall, traders are positioning for a cautiously optimistic session, balancing the prospects of diplomatic resolution in the Middle East with ongoing economic indicators from Europe’s major economies.