European Stocks Rebound as Oil Prices Ease Amid Ongoing Conflict

European stocks staged a modest rebound on Friday as oil prices eased from their five-month highs. The pan-European STOXX 600 index managed a 0.5% rise, closing at 639.1 points.

The recovery came despite a challenging week for investors, who were rattled by rising inflation expectations and higher bond yields. The European Central Bank's decision to raise interest rates highlighted persistent inflation risks linked to soaring energy prices, which have been exacerbated by the ongoing Middle East conflict.

Tensions between the U.S. and Iran have also contributed to oil price volatility, with prices exceeding $100 per barrel. This has posed additional challenges for the ECB, which is grappling with the impact of higher energy costs on inflation.