European Markets Hit Record Highs as STOXX 600 Posts Strong Weekly Gains

Key Facts

European equity markets closed at record levels on Friday, with the pan-European STOXX 600 index climbing 0.7% to reach a new historical peak. Germany's DAX also hit fresh record highs as investors welcomed signs of easing pressure regarding US monetary policy. This rally was primarily driven by a rotation into cyclical sectors following weaker-than-expected US employment data, which lowered market expectations for aggressive near-term interest rate hikes by the Federal Reserve.

This robust performance coincides with improving economic sentiment across the Eurozone, as market data from June 29, 2026, showed the EU Economic Sentiment index rising to 95, beating forecasts of 94.3. Additionally, inflation in major economies like France slowed to 1.8% annually in June from 2.4% previously, according to official statistics. This cooling inflation trend provides a supportive backdrop for European equities as it contrasts with more persistent price pressures seen earlier in the year.

Investors should monitor whether these record levels can be sustained into July, with a close eye on the Chinese Manufacturing PMI due on June 30 as a global risk-appetite catalyst. Key upcoming events include a speech by ECB President Christine Lagarde on June 29, which may provide further clarity on the European rate path, alongside German unemployment data which recently held steady at 6.3% as of the June 30 reporting period.