Both the STOXX 50 and STOXX 600 edged up 0.2% on Friday, rebounding after two consecutive sessions of losses. Despite the modest gains, both indexes are on track to end the week largely unchanged, as traders await fresh catalysts amid ongoing concerns over the US fiscal outlook, which continues to unsettle global markets and push bond yields higher.
European stocks edge higher
Investors remain cautious as uncertainty around U.S. budget dynamics and mounting debt levels weighs on risk appetite and raises questions about the long-term stability of global financial conditions.
On the trade front, high-level dialogue between Beijing and Washington continued, with senior officials holding a call on Thursday—an encouraging sign that both sides remain open to reaching a compromise despite persistent tensions. Hopes for de-escalation were further bolstered by news that EU and US officials are also expected to hold a virtual meeting on trade policy today, with discussions likely to focus on tariffs, critical raw materials, and industrial subsidies.
On the data front, Germany’s Q1 GDP growth was revised upward to 0.4%, double the initial estimate of 0.2%. The stronger-than-expected reading was driven largely by a robust performance in the manufacturing sector and a sharp surge in exports in March, particularly to non-EU countries. This upward revision provides a glimmer of optimism for the eurozone’s largest economy, which had been flirting with stagnation amid weak domestic demand and geopolitical headwinds.
Positive earnings season in Europe
Investor sentiment was also lifted by a relatively upbeat earnings season in Europe, with several heavyweight corporates outperforming. On the corporate side, Bayer (+2.4%) gained after announcing progress in its restructuring efforts, while Philips (+1.5%) extended gains following a favorable regulatory update on its sleep apnea devices. Tech giant SAP (+1%) and industrial powerhouse Siemens (+0.8%) also contributed to the index’s strength, buoyed by solid forward guidance and continued momentum in digital and automation-related segments.
Overall, while the rebound was modest, Friday’s session reflected a degree of resilience in European equities, underpinned by positive corporate news and better-than-expected macro data. However, markets remain fragile, with external risks—particularly related to U.S. fiscal policy and global trade dynamics—likely to dictate the next major move.
