European Shares Rebound as Bond Selloff Diminishes, Oil Prices Stabilise

European equities edged higher on Thursday, snapping a three‑day losing streak as the global bond market cooled and investors shifted focus to forthcoming U.S. data that could shape the Federal Reserve’s policy path. The pan‑European STOXX 600 lifted 0.2 % to 646.96 by 0810 GMT, a bounce from the one‑month low recorded the day before.

Regional indices delivered mixed results: Germany’s DAX gained 0.1 %, Spain’s benchmark rose 0.5 %, while France’s CAC 40 slipped 0.1 %. A standout performer was Soitec, whose shares surged 10 % to the top of the STOXX 600 after the French chip‑materials maker lifted its Q2 2027 revenue‑growth forecast to 50 % year‑on‑year from the previous 30 % projection.

The backdrop to the rally remains the easing of a global bond selloff that had been triggered by the escalation of the Iran conflict, which pushed oil prices higher and amplified worries about persistent inflation, mounting government debt and tighter monetary policy. European markets, heavily reliant on energy imports, are particularly sensitive to oil price swings.

Oil prices have moderated but remain above $90 a barrel, and euro‑zone bond yields have fallen from multi‑year highs. "Even though Brent will fluctuate, the actual product people use is at the highs of March and April, and this will have an impact. I think in Europe, it's part of why we believe the ECB, even though growth is not that huge, will probably have high rates," said Ricardo Castillo, head of investments at Mirabaud Group.

A recent survey indicated that growth in the euro‑zone’s dominant services sector slipped to a two‑month low in August, yet robust, broad‑based demand kept overall private‑sector activity steady.

Higher energy costs are feeding expectations of tighter policy worldwide. Market participants largely anticipate that the European Central Bank will raise its key borrowing rate to 2.5 % at its next policy meeting and deliver two additional quarter‑point hikes by mid‑2027.

US non‑farm payrolls, due Friday, will be closely watched for new clues on the Fed’s stance, following hawkish remarks from Chair Kevin Warsh last week that have increased speculation of further rate increases.

Other moves in the market included Deutsche Telekom AG shares rising 1.7 % after reports of Elliott’s stake acquisition, while insurer and money manager M&G slipped 0.2 % after its first‑half results. Sofina gained 3.6 % after announcing growth in net asset value for the first half of 2026 and revealing SpaceX as the largest holding in its top private‑fund portfolio.