European Stocks Rebound but Head for Biggest Weekly Decline in Months

European stocks are on track to post their biggest weekly decline in about two months as investors continue to worry about inflation and aggressive interest rate hikes.

The pan-European STOXX 600 was up 0.4% at 638.63 points by 0837 GMT, but this gain is unlikely to be enough to offset the losses seen earlier in the week.

The European Central Bank's decision to raise interest rates and warn of higher inflation has contributed to the recent market volatility, with government bond yields across the globe surging as traders expect central banks to keep interest rates higher for longer.

The U.S. 10-year Treasury yield, a benchmark for global borrowing costs, is hovering below the closely watched 5% level, while the German 10-year yield remains near multi-decade highs.