European stocks rise on positive earnings and Fed rate cut hopes

European stocks rose Friday to post a second straight weekly gain, helped by bullish earnings and global investor optimism about a September Federal Reserve rate cut. The pan-European STOXX 600 index closed up almost 0.9%, while a gauge of eurozone blue chips rose 1.3%, both hitting intraday highs in more than a month.

Sweden’s Addtech hit a record high, rising 16% on a positive outlook for the future, while Ericsson rose 4.3% after better-than-expected earnings. The benchmark Swedish index rose 2.2%. Elsewhere, Norwegian Air rose 7.8% after beating second-quarter earnings expectations, despite the impact of lower ticket prices. While strong second-quarter earnings could bolster near-term STOXX 600 EPS momentum, they predict future downgrades due to weakening global economic growth, according to strategists at BofA Global Research.

In the United States, earnings season began with the release of Q2 results from major banks like JPMorgan Chase, Wells Fargo and Citigroup. France’s CAC 40 rose 1.3% after a tumultuous election week. Annual consumer prices in France rose 2.5% in June, while German wholesale prices fell 0.6%.

Investor sentiment remained upbeat, supported by expectations of a Fed rate cut in September after a surprise drop in U.S. consumer prices, despite a rise in producer prices reported on Friday. Among other stocks, Swiss firm EMS Chemie fell 4.9% after cutting its 2024 sales forecast, and Axfood fell 9.0% on operating costs. Aker BP reported lower-than-expected second-quarter profit, but its shares rose 3%.

(Disclaimer: Based on information obtained from the agency.)