European shares rose 1% on Wednesday, with travel and financials stocks among the top gainers, on expectations for a de-escalation in the Middle East conflict, although concerns about the war’s economic impact kept gains in check.

The pan-European STOXX 600 was up 1.3% at 586.73 points by 0812 GMT after the benchmark clawed back some losses on Tuesday.

The travel and leisure sector, which had taken a hit earlier this month, added 2%, while banks added 1.6%.

Oil price-sensitive airlines such as Lufthansa and Air France climbed 2.4% and 3.7%, respectively.

President Donald Trump said the U.S. was making progress in its efforts to negotiate an end to the war with Iran, while a source confirmed that Washington had sent Iran a 15-point settlement proposal.

However, caution lingered as Tehran denied that direct talks had taken place, with a spokesperson saying the U.S. is “negotiating with itself”.

There is still little clarity on whether the talks would lead to the reopening of the Strait of Hormuz, which has been largely cut off since the Iran war erupted.

While oil prices slipped below the $100 mark, the long-term effects of the recent spike on the global economy could be drawn out.

Among stocks, Spanish drugmaker Grifols climbed 8.1% after announcing it had approved a U.S. initial public offering of its U.S. biopharma business.