The Pan-European STOXX 600 closed up 0.5% and all major regional stock markets also ended in positive territory.
Data showed U.S. consumer prices rebounded as expected in July but the trend remained consistent with slowing inflation, a day after softening producer price figures bolstered hopes the Federal Reserve will cut rates soon.
“The CPI report is a green light for the Fed to cut interest rates at its next policy decision on Sept. 18,” said Bill Adams, chief economist at Comerica Bank.
Comerica expects the Fed to cut the federal funds target by a quarter percentage point in each of the next four decisions in September, November and December, and in January 2025. Investors expect the Fed to deliver a Reduction of rates The travel and leisure index posted its biggest daily gain of 3%, boosted by a 10.5% rise in Flutter, after the world’s largest online gambling firm raised its full-year outlook. News that the Irish gambling giant is in talks to buy Playtech’s Italian unit Snaitech sent shares in the UK gambling technology firm up 14%.
In the eurozone, second quarter data showed that eurozone GDP rose 0.3% quarter-on-quarter, while employment increased 0.2% quarter-on-quarter.
In addition, French consumer prices rose 2.7% year-on-year in July, slightly above the preliminary reading for the previous month.
In it earnings Swiss bank UBS rose 5.3% after posting quarterly profits that doubled market forecasts.
This was coupled with a nearly 7% rise in German insurer Talanx after results pushed the financial index to a near two-week high.
Straumann rose 13% after the dental implant maker announced the sale of its DrSmile aligner business and raised its full-year outlook.
Among others, Thyssenkrupp fell 6.3% after posting a quarterly net loss, while Carlsberg fell 4% after a gloomy outlook for the Chinese market.
Of STOXX 600 companies that reported second-quarter earnings, 54.8% beat estimates, LSEG data showed, compared with the typical beat rate of 54%.
However, gains were kept in check by losses in basic resource stocks.
Utilities were also hit by a near 6% drop in RWE after the group’s management failed to allay concerns over a report that it might buy shares in a US gas-fired power plant operator.
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