Investors spent much of the year fleeing toward U.S. and Asian tech sectors, leaving European valuations at a significant discount. According to Ward, the easing of the Hormuz crisis provides a window to return to pre-conflict strategies that prioritize global diversification. While skepticism remains rampant—with many market participants still viewing the region as structurally stagnant—this lack of consensus is exactly what signals a buying opportunity to JPMorgan.

However, the path to recovery faces stiff resistance from the European Central Bank. Officials recently raised key interest rates for the first time since 2023 and cautioned that the regional energy price shock will likely persist for months. Even with a tentative U.S.-Iran agreement tempering oil volatility, the ECB maintains a hawkish stance, refusing to rule out additional rate hikes this year to combat lingering inflationary pressures. For investors, the trade-off remains clear: betting on a turnaround in European fundamentals while navigating a central bank that is not yet ready to pivot.