Key facts
- European stocks rallied on Friday, with the STOXX 600 index up 1.9%.
- Oil prices fell amid hopes for a U.S.-Iran diplomatic breakthrough.
- U.S. President Donald Trump indicated a deal with Iran was close.
- SpaceX completed a record IPO, valued at $1.77 trillion.
- German inflation eased to 2.7% in May.
- The UK economy contracted by 0.1% in April.
European stocks surged on Friday, with major indexes jumping more than 1%, as renewed hopes for a diplomatic breakthrough in the Middle East dragged oil prices lower and injected fresh optimism into the market. Brent crude futures fell 3.7%, extending the previous session's losses, after U.S. President Donald Trump cancelled plans to strike Iran and said a deal could be reached as soon as this weekend.
The pan-European STOXX 600 index advanced 1.9% to 633.21 points, logging 1.7% gains for the week. Spain's IBEX 35 Index outperformed regional peers, climbing more than 2.6% and hitting an all-time high.
Chris Beauchamp, chief market analyst at IG Group, noted that the market action had given sentiment across Europe the boost it was looking for, suggesting that lower valuations might encourage investors to look at European stocks with more confidence. The upbeat end to the week followed a period of turbulence for European shares, including swings in AI-linked tech stocks and pressure on UK-listed banks.
Energy shares were the only laggards on Friday, declining 1% and tracking falling crude prices. Travel and leisure stocks were the day's top performers, rising 4.1% and hitting a five-month high, with airlines Lufthansa and Air France, and tourism group TUI AG all seeing significant gains. The STOXX 600 banks index also led sectoral gains with a 4.3% rise.
In corporate news, Acciona Energia jumped 13% after reports of global infrastructure funds bidding for stakes, while its parent Acciona also rose. Novo Nordisk added 1.7% after Britain approved its weight-loss pill. On the data front, German inflation eased slightly to 2.7% in May, while Britain's economy contracted by 0.1% in April. Global investors also watched SpaceX's stock jump over 20% in its Nasdaq debut, lifting its valuation to more than $2 trillion.