European stocks climbed on Thursday as signs of a cooling U.S. labor market fueled optimism that the Federal Reserve is poised to cut interest rates.
The Stoxx Europe 600 index closed 0.5% higher, with automakers leading gains after Bank of America upgraded ratings for car manufacturers including Mercedes-Benz Group and Porsche. Industrial stocks also performed strongly, while travel & leisure and healthcare sectors were the biggest drags.
Among individual movers, Schneider Electric rose 3.5% and Siemens Energy gained 2.5% after JPMorgan analysts upgraded both companies, citing continued optimism in Europe's capital goods sector. Philips dropped 5.7%, marking the steepest decline in the index, as Citi analysts flagged tariff risks and challenges in the Chinese market by 2026.
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