Europe slides to a one-week low as Trump declares the Iran ceasefire MoU “over” from the NATO summit in Ankara, Iran drone-strikes US-linked bases in Bahrain and Kuwait, oil spikes more than 6%, the STOXX 600 suffers its biggest one-day drop since March, Trump threatens to cut off all trade with Spain, the DAX and CAC 40 lead continental losses, German 30-year Bund yields extend their climb on inflation risk and a hawkish ECB repricing, Ethereum and XRP both stay capped by Dollar strength, the RBNZ delivers its first hike in three years, and traders count down to the FOMC’s June Minutes — the first under new Fed Chair Kevin Warsh — due later in the session.

The dominant story of the European session is the sharp deterioration in the fragile US-Iran truce, and markets are now reacting in earnest. Speaking from the NATO summit in Ankara — convened under the shadow of the ongoing conflict and already tense over European allies’ reluctance to support Operation Epic Fury against Iran — a furious President Trump declared that the ceasefire memorandum of understanding signed exactly three weeks ago “is over,” telling reporters “I don’t want to deal with them anymore … as far as I’m concerned, it’s a waste of time dealing with them.” The remarks came hours after US Central Command confirmed strikes on more than 80 Iranian targets in retaliation for Tuesday’s attack on three commercial vessels transiting the Strait of Hormuz, and after the US Treasury revoked the sanctions waiver that had allowed Iran to sell crude on the open market. In the immediate aftermath, Iran’s Revolutionary Guard claimed drone and missile strikes on US-linked military sites in Bahrain and Kuwait, triggering missile-alert sirens in Manama for a third time this morning — the first direct strikes on Gulf-based US installations since the truce began. Iran’s Foreign Ministry placed responsibility for the renewed hostilities squarely on Washington, describing the US strikes and reimposed sanctions as having “rendered important and fundamental parts” of the truce “ineffective.” The pan-European STOXX 600 has responded by sliding roughly 1.6% to a one-week low near 636 points, on track for its steepest one-day fall since the height of the Iran conflict in March, with defence stocks down about 3.5% and energy shares up around 2% on the oil spike, while airlines including Air France and Wizz Air have each dropped more than 5% and Lufthansa has slid over 5% following a broker downgrade.

The NATO summit backdrop compounds the uncertainty, and is now a market-moving story in its own right. Trump arrived in Ankara already frustrated with European allies over their limited support for US military operations against Iran, and on the summit’s second day he said the US “could remove all our soldiers out of Europe,” reiterated his interest in Greenland, and separately said he had ordered Treasury Secretary Scott Bessent to cut off all trade with Spain, calling Madrid a “terrible partner” in NATO over its defence-spending commitments — a threat that has sent Spain’s IBEX to a three-week low and made it the weakest major eurozone index on the day. Bloomberg reported that NATO members nonetheless agreed more than $50 billion in fresh transatlantic defence-industry contracts at the summit, even as the alliance works to finalise a declaration reaffirming its “ironclad commitment” to collective defence and a fresh €70 billion Ukraine assistance pledge for 2026. For markets, the practical read-through has been a firmer, safe-haven-supported US Dollar across G10 pairs in early European trade, with EUR/USD pinned near the 1.1400 handle and GBP/USD easing from Tuesday’s London-close levels, even though Sterling continues to find some support from hopes that Andy Burnham’s emergence as the clear frontrunner to succeed Keir Starmer will preserve continuity in UK fiscal policy. Germany’s DAX and France’s CAC 40 are both down more than 2% on the session, underperforming London, whose FTSE 100 has fallen back below the 10,500 level it briefly held earlier in the week.

In commodities, WTI crude has surged over 6% since Tuesday’s close to around $74.44 a barrel, testing its technically significant 200-day moving average, while Brent has climbed above $78, as the Bahrain and Kuwait strikes and Trump’s Ankara comments load a fresh risk premium back into the barrel. Silver, by contrast, is holding below the psychologically important $60 mark for a second straight session, pressured less by the Dollar’s safe-haven bid and more by the accompanying rise in US Treasury yields, which continues to weigh on the non-yielding metal even as gold stages a shallow, short-lived bounce above $4,100. On the London Stock Exchange, the FTSE 100 has slid to around 10,513, down roughly 1.6% and breaking back below the 10,500 support level, with the broader pan-European STOXX 600 down a similar amount at a one-week low; renewed selling in mining names including Antofagasta, Anglo American, Fresnillo and Rio Tinto — pressured by a firmer Dollar and softer China-demand signals — is offsetting gains in energy majors Shell and BP, both extending Tuesday’s advance on firmer crude, while defence stocks lag broadly on the darkening geopolitical mood. Germany’s DAX and France’s CAC 40 have fared worse, both down more than 2%, while Spain’s IBEX has hit a three-week low after Trump’s trade threat against Madrid. UK data released this morning painted a mixed but broadly resilient picture, with the KPMG/REC Report on Jobs showing permanent placements easing at a slower pace in June and the Halifax house price index recording its first monthly gain in four months.

In rates, Germany’s 30-year Bund yield is extending its climb toward 3.63%, as the combination of oil-driven inflation risk from the Hormuz-Bahrain-Kuwait escalation and Germany’s expanded 2027 budget draft — €555.4 billion in planned spending and €203.6 billion in borrowing, both raised from earlier estimates — continues to pressure the long end of the euro-area curve, a move compounded by markets now pricing 38 basis points of ECB tightening this year, up from 25bps as recently as Tuesday, and also tracking a broader global rise in long-dated yields including in Japan. In crypto, Ethereum is holding near $1,736.90, capped by the firmer Dollar and cautious broader risk appetite even as some large wallets continue to accumulate, while XRP trades near $1.0797, tracking the broader softness across majors. Overnight, the Reserve Bank of New Zealand delivered its first Official Cash Rate hike in three years, lifting the OCR by 25 basis points to 2.50% and flagging that further tightening remains likely even as falling oil prices had eased near-term inflation pressure — a decision markets are reading as part of a broader hawkish undertone building across several Asia-Pacific and G10 central banks. Elsewhere, mourners have thronged the streets of Najaf for the funeral procession of Iran’s late Supreme Leader Ali Khamenei, ahead of his burial in Iran on Thursday, a backdrop that traders say adds to uncertainty over Tehran’s decision-making in the days ahead. Attention now turns squarely to the Federal Reserve’s June Meeting Minutes, the first released under new Fed Chair Kevin Warsh, due at 18:00 GMT (2:00 PM ET), as the session’s decisive catalyst heading into the US afternoon.