European stocks rose on Thursday on hopes the Federal Reserve could keep interest rates steady this month, while the passage of a US bill through the House of Representatives brought relief to investors worried about a potential debt default.

The pan-European STOXX 600 index rose 0.7% after closing at a two-month low in the previous session.

US House of Representatives on Wednesday passed the bill to suspend the $31.4 trillion debt ceiling and avoid a catastrophic default, with market focus now turning to the Senate.

Some Fed officials pointed towards an interest rate hike “skip” in June, prompting a quick reversal of market expectations for another hike as the US central bank weighs the value of caution against still-strong inflation data.

Readings on euro zone inflation in May and unemployment rate in April are due later in the day.

European stocks hit two-month low on weak China data

Among single stocks, Remy Cointreau rose 1.4% as the French spirits group reported a higher-than-expected rise in operating profit for its 2022/23 fiscal year and stuck to its cautious prospects for this year.

Shares of Heidelberg Materials climbed 2% after J.P.Morgan upgraded the cement maker’s stock rating to “overweight”, calling it a “big opportunity” as the sector looks to attract more investors on decarbonisation efforts.

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