European shares rose on Tuesday, led by media and banking stocks, although a deadline for Iran to reopen the Strait of Hormuz kept investors on edge.

The STOXX 600 index was up 0.6% at 600.33 points by 0854 GMT, a near three-week high. Trading resumed after Europe’s extended Easter weekend, which included the Good Friday and Easter Monday holidays.

Regional stock markets also traded in positive territory, with London’s FTSE 100 up 0.2%, while Spain’s IBEX gained 1%.

“Investors position carefully rather than fully pricing in the worst-case scenario,” said Matt Britzman, senior equity analyst at Hargreaves Lansdowne.

“Either way, today is likely to be one of the most volatile trading sessions since the conflict began, with any headlines likely to drive meaningful swings in global markets.”

Markets have been volatile since the US-Israeli war over Iran erupted in late February, with the STOXX 600 down more than 5%. Tehran’s effective closure of the strait has raised inflation concerns and shaken investor confidence.

Despite hopes for a diplomatic breakthrough, talks have so far failed to make progress. US President Donald Trump has imposed a deadline of 8 pm ET Tuesday (0000 GMT Wednesday) to strike a deal.

Among sectors, media rose 5.8% as Universal Music Group rose 12.7% after it proposed a cash-and-stock takeover worth about 55.75 billion euros ($64.31 billion).

Heavyweight banks rose 1.5%.

In contrast, information technology stocks lagged semiconductor equipment leader ASML, falling 3% after a cross-party group of US politicians proposed legislation to impose more restrictions on exports of computer chipmaking equipment to China.

On the monetary policy front, ECB policymaker Dimitar Radev warned that while risks to euro zone inflation expectations are rising faster than in the past, the central bank should be prepared to raise rates quickly if price pressures persist.

According to LSEG data, traders are now looking at about three rate hikes by the end of the year.

Meanwhile, economic data painted a mixed picture. Euro zone PMI data showed private sector expansion weakened sharply in March as the Middle East conflict pushed up energy costs and disrupted supply chains, with aggregate demand falling for the first time in eight months.

Swedish consumer prices rose less than expected in March, showing little impact from higher oil prices so far. Sweden’s benchmark index rose 1.4%.

($1 = 0.8674 euros)