European stocks closed at a record high on Friday, July 3, extending their rally to a fourth consecutive week after weaker-than-expected U.S. employment data reinforced expectations that the Federal Reserve could begin easing monetary policy sooner than previously expected. The pan-European Stoxx 600 rose 0.69% to a fresh record close, capping its strongest weekly performance in about a month as gains broadened well beyond technology shares.

The move followed Thursday’s U.S. Bureau of Labor Statistics report showing the American economy added 57,000 jobs in June, well below the 115,000 economists had expected and down sharply from May’s downwardly revised 129,000. The weaker labor market data eased concerns that the Fed would need to keep interest rates higher for longer, lifting investor sentiment across global markets.

Germany’s DAX led Europe’s major indexes, climbing 0.85% to another record high. Italy’s FTSE MIB gained 0.77%, while France’s CAC 40 added 0.48%. London’s FTSE 100 also ended the session higher as investors rotated into economically sensitive sectors.

The shift marked an important change in market leadership. While technology companies have fueled much of this year’s rally, Friday’s gains spread across industrials, financials, banks, and other cyclical sectors, suggesting investors are becoming more confident that lower borrowing costs could support broader economic growth. Utilities also outperformed, rising 1.78%, reflecting continued demand for defensive investments alongside renewed optimism about the economy.

Several developments added to the positive tone. Investors increasingly believe the European Central Bank may delay additional interest-rate increases as inflation continues to moderate across the eurozone. Germany’s governing coalition reached agreement on a package of tax, labor, and pension reforms, while stronger-than-expected Chinese services sector data improved confidence in global growth before European markets opened.

Among individual stocks, French biotechnology company Abivax led the Stoxx 600, rising as much as 7.7% before closing roughly 6.7% higher after raising €767.1 million ($874.1 million) through an expanded share offering to help fund U.S. development of its inflammatory bowel disease treatment, obefazimod. In Frankfurt, Siemens advanced 1.2% after Kepler Cheuvreux upgraded the stock to “hold” from “reduce.” European defense companies also gained as investors anticipated increased military spending following Russia’s latest large-scale strike on Ukraine. Earlier in the week, banking shares outperformed after UniCredit advanced on developments surrounding its bid for Commerzbank, while Deutsche Bank also posted strong gains.

Commodities and Volatility

Gold rose as investors sought traditional safe-haven assets following the weaker U.S. employment report, while the U.S. dollar headed for its largest weekly decline in nearly three months, making dollar-denominated commodities more attractive for overseas buyers. Oil prices were little changed, with Brent crude trading near $71.76 a barrel and West Texas Intermediate around $68.41, as traders continued monitoring the fragile ceasefire between the United States and Iran. U.S. financial markets remained closed for the Independence Day holiday, reducing trading volumes worldwide.

Investors now turn their attention to upcoming European purchasing managers’ surveys and the next round of U.S. economic data for fresh clues on the outlook for interest rates. For now, Europe’s rally appears to be broadening beyond a handful of technology companies into a wider range of industries—a sign that investor confidence is becoming increasingly widespread rather than concentrated in a few market leaders.

JBizNews Desk | New York

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