European shares lost their initial momentum on Friday, led by declines in technology and financials, with sentiment taking a hit after Federal Reserve Chair Jerome Powell noted the need for further interest rate hikes at the much-awaited Jackson Hole Symposium.

The pan-European STOXX 600 closed unchanged, after rising as much as 0.7% intraday, but notched its best week in four backed by a chipmakers’ rally leading up to Nvidia’s quarterly results on Wednesday and rising commodity prices.

Powell said rates need to rise further to ensure inflation is contained, with interest rate futures tied to the Fed’s policy rate slightly increasing the chances of tightening at both the November and December meetings.

“There’s no material change from what was already known … Powell basically stuck to the script. In all fairness, today’s speech reinforces the point the Fed’s policy decisions are obviously very much subject to incoming economic data,” said Andreas Bruckner, European equity strategist at BofA Global Research.

Also pressuring equities was a rise in euro zone yields after Powell’s speech.

Leading the day’s decline were financial services and technology stocks, down 0.7% and 0.6%, respectively.

Next in line, European Central Bank President Christine Lagarde is set to take the stage at 1900 GMT.

ECB policymakers are increasingly concerned about deteriorating growth prospects, and while the debate is still open, momentum for a pause in hikes is building, Reuters reported.

Meanwhile, Spain’s deputy central bank governor said euro zone inflation is expected to decline further over the remainder of 2023, but would stay above the 2% target for an extended period, while data showed Spanish industrial prices falling 8.4% through July, down from a revised 8% decrease in the 12 months through June.

Further, German’s economy stagnated in the second quarter compared with the previous three months, following a winter recession, while a separate survey showed German business morale deteriorated further in August for the fourth month in a row.

Helping stave off a decline in the benchmark STOXX 600, however, was a 0.3% rise in the energy sector, tracking strength in crude prices.

For the week, retail was the worst sector index performer, while utilities was the top gainer.

Among major movers, Watches of Switzerland dropped 20.9% to the bottom of STOXX 600, notching a record one-day drop, as Rolex’s purchase of retailer Bucherer raised questions about Watches’ prospects.

Danish benchmark index lagged other European bourses as Novo Nordisk, Europe’s second-biggest listed firm, eased 1.1%, falling for the second straight session.