European stocks soar on earnings and interest rate cut optimism

European stocks rose on Friday for a second straight weekly gain on encouraging financial results and optimism from global investors about a potential Federal Reserve rate cut in September.

The pan-European STOXX 600 index rose almost 0.9%, while the euro zone blue-chip gauge rose 1.3%, both hitting their highest intraday levels in more than a month. Sweden’s Addtech hit an all-time high, rising 16% after a positive outlook for the coming quarters. Ericsson rose 4.3% as the telecoms equipment maker beat profit and sales forecasts on stronger demand in North America.

Norwegian Air rose 7.8% after beating expectations for core second-quarter earnings, despite a small drop in demand weighing on ticket prices. However, strategists at BofA Global Research caution that while solid second-quarter earnings could support STOXX 600 earnings per share momentum in the near term, there could be potential downside as global growth weakens and the impact of monetary tightening becomes apparent. The U.S. earnings season also opened with strong results from major banks.

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