European stocks closed sharply higher on Tuesday, tracking the strong momentum for global equities as geopolitical conflict in the Middle East showed signs of de-escalation and key energy commodities trimmed their surge. The STOXX 50 surged 1.5% to close at 5,297 and the pan-European STOXX 600 rose 1.1% to 541. Oil and LNG tankers continued to navigate through the Strait of Hormuz to extend the sharp decline in energy prices, softening the inflation outlook for energy importers in Europe. Meanwhile, investors turned their attention to the NATO summit kicking off today in The Hague, where leaders are expected to pledge more security spending and add to the guidance increases for defense companies, which are among the leaders of gains in European equity markets this year. Banks and tech led the gains, with UniCredit, ASML, and Adyen all jumping more than 3%.