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European stocks rose on Friday, buoyed by signs of de-escalating trade tensions between the United States and China, boosting optimism for further trade deals before the deadline for the U.S. tariff pause in July.
The pan-European STOXX 600 index advanced by 0.6%, reaching 540.67 points as of 07:07 GMT, positioning it to log its first weekly gain in three weeks. Other major regional indices also saw gains, reflecting renewed investor confidence.
A key catalyst for the positive sentiment came from a White House official’s announcement that the U.S. and China had reached an agreement on expediting rare earth shipments to the United States. This news alleviated some of the lingering trade concerns, fueling expectations of progress toward new trade deals before the expiration of the U.S. tariff pause in early July.
With the Middle East tensions easing for the time being, market focus shifted to trade, particularly following discussions at a European Union summit in Brussels on Thursday. EU leaders deliberated new trade proposals from the U.S., with Commission President Ursula von der Leyen acknowledging that while discussions were ongoing, “all options remain on the table” regarding tariff talks.
Sectoral performance was notably strong in European auto stocks, which climbed 1.5%, and media shares, which advanced 1.2%. Among individual stocks, German sportswear makers Puma and Adidas gained 4.3% and 2.9%, respectively, following positive revenue forecasts from their U.S. counterpart, Nike.
As investors await the U.S. core PCE price index release later in the day, attention is likely to shift to inflationary trends, which could influence future monetary policy decisions.
