European stock markets closed the week on a positive note Friday, recovering from recent volatility driven by Middle East tensions and trade disputes.
By 07:10 GMT, Germany’s DAX index had risen 0.8%, France’s CAC 40 gained 0.9%, and the UK’s FTSE 100 edged up 0.2%.
Global Sentiment Strengthens
Investor confidence is lifting globally, helped by a seemingly stable ceasefire between Israel and Iran, brokered earlier this week by U.S. President Donald Trump.
Trade relations between the U.S. and China also showed early signs of easing. In a recent Bloomberg Television interview, U.S. Commerce Secretary Howard Lutnick confirmed that both countries have finalized a trade understanding initially agreed upon in Geneva last month, though details remain sparse. Lutnick added that the U.S. is also close to completing a trade agreement with India.
Meanwhile, the European Union is reportedly considering reducing tariffs on certain U.S. imports to facilitate a quicker trade deal with the U.S., according to the Wall Street Journal. Despite the approaching July 9 deadline set by the White House for new trade agreements, press secretary Karoline Leavitt suggested the timeline “is not critical.”
Focus on U.S. Inflation Data
Market optimism was further supported by expectations of possible interest rate cuts from the Federal Reserve, amid weaker U.S. economic data and speculation of a more dovish Fed leadership ahead. Fed Chair Jerome Powell cautioned that rate reductions will wait until the inflation impact from tariffs is better understood, sparking criticism from President Trump, who has hinted at nominating Powell’s successor before his term ends in May 2026.
The upcoming release of the core Personal Consumption Expenditures (PCE) price index—the Fed’s preferred inflation metric—is expected to provide fresh insight into the central bank’s policy direction.
In Europe, inflation data showed French consumer prices increased by 0.9% year-over-year, surpassing the 0.7% forecast, while Spain’s inflation rate rose 2.2%, exceeding expectations of 2.0%.
Corporate Moves: Akzo Nobel and Unilever
On the corporate front, Akzo Nobel (EU:AKZA) announced it will sell its stake in an Indian subsidiary to JSW Group for approximately €1.4 billion. The proceeds will partly fund a share buyback program.
Additionally, Unilever (LSE:ULVR) is acquiring U.S. men’s personal care brand Dr Squatch from private equity firm Summit Partners for $1.5 billion, according to the Financial Times.
Oil Prices Rebound But Face Weekly Decline
Oil prices edged up on Friday but are on course for their largest weekly drop in over two years, as easing geopolitical risks from the Israel-Iran ceasefire have reduced the risk premium in the market.
At 03:10 ET, Brent crude futures rose 0.7% to $67.17 per barrel, while U.S. West Texas Intermediate crude climbed 0.8% to $65.76 per barrel.
Despite this modest rise, both benchmarks are set for weekly losses near 12%, the steepest since March 2023, returning to pre-conflict price levels. The small gains toward the end of the week were supported by U.S. government data showing a drop in crude oil and fuel inventories, signaling sustained demand in the world’s largest economy.
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