European Stocks Set for Strong Open

European stocks closed sharply higher on Friday, recovering from losses in the previous session with support from auto manufacturers, luxury brands, and heavyweight banks. The Euro STOXX 50 gained 1% to 6,492 and the STOXX Europe 600 rose 0.6% to 655, both at their highest in nearly two weeks. Volkswagen, Mercedes-Benz, and BMW jumped between 4% and 3%, ending a volatile week on a positive note as markets continued to assess how the sector is exposed to US tariffs on Mexico and Canada, in addition to benefits from higher industrial profits in China. Strong Chinese economic data also supported luxury brands, with LVMH, Hermes, and Ferrari adding more than 2%. Meanwhile, European banks rose sharply after Fed Chairman Warsh struck a more hawkish tone than previous communication and flattened the global yield curves. BNP Paribas added 2% while UniCredit and BBVA gained 1.5%. Expectations of a rate hike by the ECB were consolidated after the release of higher inflation in France and Spain.

European equity markets traded higher on Friday, with the STOXX 50 gaining 0.8% and the broader STOXX 600 advancing 0.5%, as investors digested economic data and awaited Federal Reserve Chair Kevin Warsh’s speech at the Jackson Hole symposium for clues on the US interest-rate outlook. French lenders led the gains, with Societe Generale, BNP Paribas and Crédit Agricole rising 0.8%-1% after falling sharply in the previous session on concerns over France’s political and fiscal outlook ahead of next year’s presidential election. Meanwhile, data from France and Spain pointed to renewed price pressures, with EU-harmonized inflation reaching fresh multi-year highs, strengthening expectations that the ECB could resume rate hikes in September. Corporate news was relatively quiet. Strabag surged nearly 9% after raising its full-year guidance, while Bertelsmann gained 0.2% after upgrading its 2026 outlook.

European equity markets were set to open higher on Friday as investors awaited Federal Reserve Chair Kevin Warsh’s speech at the annual Jackson Hole symposium later today for guidance on the outlook for US interest rates. Regional shares also tracked gains across global markets as Nvidia’s bullish sales forecast strengthened expectations for continued demand driven by artificial intelligence. In Europe, investors will assess inflation data from France and Spain, GDP figures from France, and unemployment data from Germany. Meanwhile, there are no major corporate earnings releases scheduled in Europe on Friday. In premarket trading, Euro Stoxx 50 and Stoxx 600 futures were up 0.3% and 0.2%, respectively.