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Stocks•25 May 2026•

2 min read

European Stocks Set for Positive Open as Nikkei Hits Record High on Geopolitical Hopes

Key Facts

1European stocks are expected to open higher, following strong gains in Asian markets.

2Japan's Nikkei 225 breached the 65,000 level for the first time on Monday.

3Market sentiment is buoyed by the continuation of talks between the U.S. and Iran.

European equity markets are poised for a positive start to the trading week, driven by strong momentum from Asia and cautious optimism regarding geopolitical developments. According to reports, European stocks are expected to follow the lead of Japan's Nikkei 225, which reached a historic milestone by breaching the 65,000 level for the first time. Market sentiment is further buoyed by the continuation of diplomatic talks between the United States and Iran, signaling potential de-escalation.

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This optimism comes as global markets process mixed economic signals, with Japan reporting an annualized GDP growth of 2.1% as of May 18, per market data. In comparison to regional peers, the European Union's balance of trade recently showed a surplus of 7.8 billion euros, significantly beating the 5.4 billion euro forecast. This performance highlights a relative resilience in the European trade sector despite persistent inflationary pressures in major economies like the UK, where inflation recently cooled to 2.8%.

Looking ahead, traders are closely monitoring the Nikkei (1306.T) as a primary indicator of global risk appetite. On the economic calendar, the market awaits the UK Consumer Price Index (CPI) release on May 20, alongside scheduled speeches from ECB and Bank of England officials to gauge the future path of interest rates. Investors will remain focused on the U.S.-Iran talks as a key catalyst for either sustained gains or a retreat to established support levels.