Volkswagen Rally Can't Offset European Share Decline Amid Inflation Fears
European shares closed the week in the red on Friday (Sep 4), despite Volkswagen's 5.9% surge to a two-month high, which helped steady the market.
The benchmark Stoxx 600 ticked up 0.1% to finish at 649.88 points, capping a volatile week with an overall decline of 0.8%. The drop was fueled by escalating conflict in the Middle East, sending crude prices higher and adding to investor concerns over sticky inflation.
Resilient US non-farm payrolls report reinforced expectations that the Federal Reserve could raise interest rates later this month. Investors are now looking ahead to next week's US consumer inflation print for a clearer signal on the Fed's trajectory.
The prospect of higher US interest rates added another layer of pressure to global equities as European economies grapple with sluggish growth and rising energy costs.