European stocks recover from one-month lows as bond yields retreat

FRANKFURT: European stocks rose on Thursday after three straight sessions of losses, as a global bond selloff eased and investors looked ahead to US economic data for clues on the Federal Reserve’s next policy moves.

The pan-European STOXX 600 was up 0.5 percent at 649.1, recovering from one-month lowshit on Tuesday. Regional indexes were also mostly higher.

Soitec jumped 10.3 percent to the top of the STOXX 600 index after the French chip materials maker raised its revenue growth outlook for the second quarter of 2027 to 50 percent year-on-year from its previous forecast of 30 percent.

Markets had come under pressure in recent days as the escalation of the Iran war lifted oil prices and amplified concerns over persistent inflation, rising government debts and tighter monetary policy.

European equities are particularly exposed to higher oil prices due to the region’s reliance on energy imports.

Oil prices eased on Thursday but remained above USD95 a barrel, while euro zone bond yields retreated from multi-year highs.

“Until there is a complete stop to attacks from both sides it is hard to see commodity prices pull back in a meaningful way, or bonds stage a long-term recovery as central banks will remain wary about inflation risks,” Kathleen Brooks, research director at XTB, said.

The latest survey showed growth in the euro zone’s dominant services industry slipped to a two-month low in August, though solid, broad-based demand kept overall private sector activity steady.

Traders are nearly certain the European Central Bank will raise borrowing costs to 2.5 percent at its policy meeting next week and deliver two additional quarter-point rate hikes by mid-2027.

“Even though Brent will fluctuate, the actual product people use is at the highs of March and April, and this will have an impact,” Ricardo Castillo, head of investments at Mirabaud Group, said.