European stocks closed sharply higher on Wednesday, outperforming North American counterparts as markets on an improving macroeconomic backdrop and fresh reports of an incoming change in leadership at the European Central Bank. The Eurozone's STOXX 50 added 1.4% to 6,105 and the pan-European STOXX 600 advanced 1.2% to 629, both at record highs. Companies with exposure to tech and AI infrastructure rose sharply as markets continued to assess the sustainability of datacenter and compute expenditure. ASML and Siemens both advanced close to 4%. In the meantime, Rheinmetall soared 5%, tracking a positive session for the European defense sector on positive earnings by BAE Systems and some fresh hawkish rhetoric by US President Trump regarding the Iran nuclear deal. Meanwhile, the Financial Times reported that Christine Lagarde could step down as ECB president before France’s 2027 presidential election.