European stocks surged for a fourth consecutive week as tensions in the Middle East eased following Iran's announcement that the Strait of Hormuz had been reopened. Markets responded to signals of reduced disruption risks to global oil supplies, with energy-related equities leading gains. The Strait of Hormuz reopening, confirmed by Iranian officials, alleviated fears of supply chain bottlenecks that had weighed on investor sentiment earlier this year.

Energy sector stocks outperformed broader indices, reflecting immediate relief over potential price stability. Analysts noted that prolonged conflicts in key shipping lanes historically trigger volatility in crude prices, which ripple through global markets. While no definitive end to hostilities is guaranteed, the development has reduced near-term uncertainty, drawing comparisons to post-conflict market rebounds seen in 2015 and 2020.

Broader European indices, including the Euro Stoxx 600, rose 1.8%, with financial and industrial sectors showing strong participation. The rebound underscores markets' sensitivity to geopolitical risk mitigation, particularly in regions critical to energy infrastructure. However, lingering concerns about escalation persist, as ceasefire terms remain unconfirmed.

This rally highlights the delicate balance between optimism and caution in risk-assessment models. While the Strait of Hormuz reopening provides a temporary catalyst, sustained stability would be required to solidify gains. Investors are now monitoring diplomatic developments in the region, with key upcoming dates tied to potential de-escalation milestones.