European stocks edged higher on Thursday as a global bond selloff showed signs of cooling. Investors had been rattled for three straight sessions, but markets found some footing as pressure eased.
The pan-European STOXX 600 rose 0.2% to 646.96 by 0810 GMT. It had hit a one-month low in the previous session.
Regional performance was mixed. Germany’s DAX gained 0.1% and Spain’s index rose 0.5%. France’s CAC 40 slipped 0.1%.
French chip materials maker Soitec was the standout performer. Its shares jumped 10%, topping the STOXX 600, after the company raised its revenue growth forecast for the second quarter of 2027 to 50% year-on-year. That was up from an earlier forecast of 30%.
The broader market had been hit hard in recent days. Rising oil prices, fuelled by an escalation in the Iran war, pushed inflation fears higher and triggered a selloff in both bonds and stocks.
European markets are seen as especially exposed to higher oil prices because the region depends heavily on energy imports.
Oil prices pulled back Thursday after President Donald Trump said renewed attacks on Iran would likely be short-lived. Even so, Brent crude remained above $90 a barrel.
Ricardo Castillo, head of investments at Mirabaud Group, said the actual energy products people use are at highs last seen in March and April. He said this supports the view that the European Central Bank will keep rates high even with modest growth.
Euro zone bond yields dipped from multi-year highs, giving some relief to stock markets. Traders are pricing in near-certain odds that the ECB will raise rates to 2.5% at its meeting next week.
Two more quarter-point hikes are expected by mid-2027.
Deutsche Telekom shares gained 1.7% after reports that activist investor Elliott Investment Management built a sizable position in the company. Elliott also indicated that Deutsche Telekom should drop any plans to merge with its US arm, T-Mobile US.
Sofina rose 3.6% after the Belgian investment holding company reported net asset value growth in the first half of 2026. The company also revealed that SpaceX is the largest holding in its top private fund.
Insurer and money manager M&G fell 0.2% after reporting first-half results.
Investors are now watching Friday’s US non-farm payrolls report closely. The data could shape expectations for the Federal Reserve’s next move following hawkish comments from Fed Chair Kevin Warsh last week.
Eurozone services sector growth slipped to a two-month low in August, though overall private sector activity held steady.
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