European Stocks Edge Up

European stocks closed higher on Friday amid softer than expected inflation data, while markets continued to gauge the likelihood of a deal in Iran. The Euro STOXX 50 added 0.3% to 6,065 and the STOXX Europe 600 inched 0.2% higher to 626.5. US President Trump's final approval was still pending following reports that the US and Iran agreed to a memorandum that would pave the way to restore tanker flows from the Strait of Hormuz, lowering energy prices and sovereign yields this week. Additionally, EU-harmonized inflation rates were lower than expected in Germany and France, raising hopes that the ECB will deliver multiple rate hikes this year. Banks closed higher following a volatile week, with BBVA, UniCredit, and BNP Paribas adding around 1.5%. In turn, SAP jumped 2.4% on a rebound for US software firms. Meanwhile, AstraZeneca rose 1% after receiving US approval for a bladder cancer treatment. The Euro STOXX 600 added 0.6% this week and the STOXX Europe 600 edged 0.2 higher.

The STOXX 50 rose 0.4% and the STOXX 600 added 0.3% on Friday, as investor sentiment improved on hopes that the US and Iran are moving closer to a deal despite recent strikes and attacks. Reports suggest the agreement would extend the current ceasefire by 60 days. Meanwhile, preliminary data for France showed the harmonised inflation rate rose less than expected to 2.8%, and in Spain it came in line with forecasts at 3.6%, while in Italy it rose more than expected to 3.3%, remaining well above the ECB’s 2% target. Most sectors traded in positive territory. Ocado surged nearly 14%, topping the STOXX 600, after announcing a partnership with Asda to deploy its platform across Asda stores. AstraZeneca rose 1% after receiving US approval for a bladder cancer treatment. Other notable gainers included ASML Holding (+0.7%), Novartis (+0.8%) and Airbus (+1.9%). Considering the May month, the STOXX 50 gained 2.9%, while the STOXX 600 is up 2.2%

European equity markets were set to open higher on Friday after reports indicated that the US and Iran had reached a tentative agreement to extend their ceasefire by 60 days, begin negotiations over Tehran’s nuclear program and potentially restore unrestricted shipping through the Strait of Hormuz. Investor sentiment also received support from a strong outlook issued by Dell Technologies, which reinforced optimism surrounding artificial intelligence-driven demand. In Europe, market participants will closely monitor inflation and labor market data from across the region for clues on the future path of monetary policy from the European Central Bank. Meanwhile, no major corporate earnings releases are scheduled for Friday. In premarket trading, futures tied to the Euro Stoxx 50 and Stoxx 600 indexes were both up around 0.2%.