European equities moved higher on Friday, with the pan-European STOXX 600 gaining 0.6% as investors awaited Federal Reserve Chair Kevin Warsh’s address at the Jackson Hole Economic Policy Symposium.

Despite Friday’s advance, the index remained on course for a weekly decline of approximately 0.4%, which would mark its third consecutive weekly loss and its longest losing run since April 2025.

European markets faced a combination of higher sovereign bond yields, volatile energy prices and mixed regional economic data during the week.

Higher bond yields weigh on European markets

Global sovereign bond yields rose earlier in the week, pushing borrowing costs across both core and peripheral eurozone markets towards multi-month highs.

Yields subsequently eased following announcements concerning U.S. government debt buybacks and a decline in energy prices.

Nevertheless, elevated borrowing costs remained a factor for European equity valuations during the week, particularly in interest-rate-sensitive areas such as real estate.

Energy markets were also volatile as geopolitical tensions surrounding the Strait of Hormuz affected crude oil and European wholesale gas prices. Prices subsequently eased as diplomatic developments reduced some immediate concerns towards the end of the week.

ECB comments remain in focus

European Central Bank policy expectations also contributed to the week’s market backdrop.

ECB Executive Board member Isabel Schnabel reiterated that interest rates would need to rise further to bring inflation under control, according to the source material.

The comments added to investor consideration of the outlook for European monetary policy alongside movements in sovereign bond yields and energy prices.

Investors await Warsh’s Jackson Hole address

Attention on Friday turned to Warsh’s first keynote address as Federal Reserve chair at the Jackson Hole symposium in Wyoming.

Investors are looking for indications of whether the Federal Reserve intends to maintain restrictive monetary policy into the autumn amid persistent headline inflation or whether softer labour-market conditions could allow policymakers to pause.

Movements in U.S. Treasury yields can influence European sovereign bond markets, making the Federal Reserve’s policy outlook relevant for financing conditions across Europe.

Investors are also watching for comments concerning the Federal Reserve’s balance-sheet strategy as governments continue to issue substantial amounts of debt.

DAX and CAC 40 join regional advance

Major European equity indices traded higher alongside the STOXX 600 on Friday.

Germany’s DAX rose 0.5%, while France’s CAC 40 gained 0.9% after declining sharply during the previous session. London’s FTSE 100 advanced 0.4%.

Technology-related shares also received support during the session following Nvidia’s earnings outlook earlier in the week.

Friday’s gains, however, were not sufficient at the time of the source material to reverse the STOXX 600’s decline for the week.