European Shares Rise as French Stocks Rebound Amid Warsh Speech

European shares closed higher on Friday, led by a rebound in French stocks. The pan-European STOXX 600 index rose 0.5% to 655.16 points, marking a modest weekly gain after two consecutive declines.

The CAC 40 firmed about 1% after sliding to a one-month low in the previous session, when worries over France's public finances ahead of next year's elections weighed on investors. French lenders Societe Generale, BNP Paribas, and Credit Agricole rose between 1% and 1.9%.

EssilorLuxottica gained 2.4% after announcing a share buyback plan. Luxury stocks firmed 2.3%, their best day in more than a month.

However, second-quarter GDP growth was revised down to flat from a preliminary 0.2% expansion, signaling weaker-than-expected momentum in the euro zone's second-largest economy.

Fitch is expected to review France's rating later in the day, a year after it downgraded the country to a record-low A+. Markets also assessed Federal Reserve Chair Kevin Warsh's speech at Jackson Hole, where he reiterated his focus on bringing inflation back to 2% while offering little guidance on future policy moves.

Warsh said, 'We are entering a new era of monetary policy, one defined by less signalling, greater emphasis on real-time data, and a willingness to rethink economic first principles as AI reshapes the economy's productive capacity.'