Shortly before 12:00 PM, the CAC 40 is enduring a drop of around 0.9%, trading near 7,910 points, while the pan-European Stoxx Europe 50 index is shedding 1.6%. Elsewhere, London's FTSE is down just 0.2%, while the Frankfurt DAX is sliding 1.8%.

Across the Atlantic, the S&P 500 ended Wednesday with a 0.7% gain, the Dow Jones rose 0.5%, and the Nasdaq 100 climbed 1.2%. However, at this stage, futures on the S&P 500 (-1.1%) and the Nasdaq 100 (-1.4%) point to a sharp reversal this Thursday.

Donald Trump's concerning remarks on Iran...

This renewed caution is fueled by Donald Trump, who warned overnight that Iran would be hit "extremely hard" for another two to three weeks, while suggesting that his military objectives were nearly "achieved."

According to Jefferies, the U.S. President's speech constitutes a short-term bearish factor for risk assets by ruling out a clearly defined diplomatic exit and brandishing the threat of further strikes.

"The uncertainty surrounding the timeline for securing the Strait of Hormuz, coupled with the pressure exerted on regional allies to protect shipping lanes, is likely to heighten volatility," the American broker warns.

...push oil prices well above 100 USD...

The resurgence of anxiety following the New York billionaire's comments is reflected in oil prices: Brent is rebounding by 8.5% to 108.8 USD, and West Texas Intermediate (WTI) is climbing 8.7% to 107.2 USD.

"We continue to diversify and hedge our portfolios against the risk that energy prices remain elevated for longer," says Mark Haefele, Chief Investment Officer at UBS Global Wealth Management.

In his note this morning, the wealth management professional nevertheless states that he "remains positioned for potential medium-term upside in global equities," holding onto hope for a possible end to the conflict in the Middle East.

...benefiting the oil majors

In corporate news, TotalEnergies is climbing 2.9% following Donald Trump's overnight reversal, which has reignited Middle East tensions. This is also lifting other European oil majors such as bp (+4.2%) and Eni (+3.8%).

Conversely, the surge in crude prices, and consequently jet fuel, is weighing heavily on the shares of major airline players, including Air France-KLM (-3.4%) and Lufthansa (-4%).

These two stocks are also suffering from unfavorable recommendations from Morgan Stanley, which, citing prospects of sustainably high costs, has lowered its price targets for both the Franco-Dutch carrier and its German peer.