European stocks closed sharply higher on Tuesday, rebounding from the three-month lows from last session as prices for key energy commodities trimmed their recent surges and eased concerns of stagflation. The Eurozone's STOXX 50 gained 2.5% to 5,830 and the pan-European STOXX 600 rose 1.8% to 606. Banks and insurers surged with support from respite for government bonds in the Eurozone, with Santander, BBVA, UniCredit, and ING rising between 5.5% and 4%. The pullback in energy prices also supported power-hungry industrial giants, with Schneider and Siemens gaining 4% and 5%, respectively. Shares with exposure to AI software and infrastructure also gained after TSMC posted strong sales results for the first two months of the year, with ASML adding 4.6%, while Infineon gained 6% and Prosus surged 10%. Meanwhile, Volkswagen rose 3% following a guidance that would reflect a rebound for operations this year.