European Stocks Close Higher Despite Fed Chair's Hawkish Tone At Jackson Hole

(RTTNews) - European stocks closed higher on Friday as investors digested regional economic data and assessed Federal Reserve Chair Kevin Warsh's speech at the Jackson Hole Economic Symposium.

Warsh's tone was hawkish as he noted that inflation remains elevated and there might be a need to tighten policy if inflation does not show signs of easing.

Following Warsh's remarks, the chances the Fed will raise interest rates by a quarter point next month have jumped to 59.5% from just 35.4% yesterday, according to CME Group's FedWatch Tool.

Investors eyed Fitch's assessment of France's sovereign rating due later in the day.

The pan European Stoxx 600 climbed 0.51%. The UK's FTSE 100 gained 0.29% and France's CAC 40 moved up 0.98%. Germany's DAX ended 0.77%, hitting a new closing high, while Switzerland's SMI edged up 0.11%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden and Türkiye closed on firm note.

Ireland edged up marginally, while Iceland closed weak.

In the UK market, SSE and Investec moved up 2.86% and 2.79%, respectively. HSBC Holdings, Severn Trent, Standard Chartered, Melrose Industries, Aviva, Vodafone Group, Informa, Burberry Group, Standard Life, Shell, Coca-Cola and Europacific Partners gained 1%-2%.

Babcock International, BAE Systems, Airtel Africa, AutoTrader Group, Howden Joinery Group, Admiral Group, AstraZeneca and Halma ended down 1%-2.4%.

In the German market, Auto stocks BMW, Volkswagen, Mercedes-Benz and Porsche Automobil Holding gained 2.9%-4.5%.

RWE, Brenntag, BASF, Allianz, Commerzbank, Deutsche Bank, Continental, E.ON, Deutsche Telekom, Symrise, Heidelberg Materials and Siemens gained 1%-2.3%.

Rheinmetall shed nearly 2%. Scout24, Fresenius, Fresenius Medical Care, Vonovia and Qiagen also closed weak.

In the French market, Renault rallied 3.7%. EssilorLuxottica gained about 2.5% after the eyewear manufacturer commenced a new program to repurchase up to 5 million shares.

LVMH, Legrand, Stellantis, Hermes International, BNP Paribas, Societe Generale, Air Liquide, Engie, AXA, Kering, Schneider Electric, Michelin, STMicroelectronics, ArcelorMittal, Credit Agricole and L'Oreal gained 1%-2.5%.

Data from Destatis showed import prices in Germany increased at a faster pace of 6.8% on a yearly basis, following May's 6.1% rise. Import prices rose 0.2% from a month ago, in contrast to the 0.7% fall in June. Prices were forecast to grow 0.3%.

Export prices were 4.2% higher than in the previous year, marking the strongest increase since February 2023. This followed a 3.5% rise in June and 3.4% increase in May. Month-on-month, export prices gained 0.4% in July.

Meanwhile, Germany's seasonally adjusted unemployment rate held steady at 6.4% in August, in line with expectations and remaining at its highest level since 2020. On a non-seasonally adjusted basis, unemployment remained above 3 million for a second consecutive month, rising by 36,260 to 3.061 million.

Data from INSEE showed France's economy stagnated quarter-on-quarter in the second-quarter, falling short of preliminary estimates of 0.2% growth, after contracting 0.2% in the previous period. Year-on-year, GDP growth expanded 0.7% in the second-quarter, slowing slightly from 0.8% in the preceding quarter.

The annual inflation rate in France accelerated to 2.4% in August 2026, the highest reading since May, up from 2.1% in July, according to preliminary estimates.

On a monthly basis, the CPI rose 0.7%, the most since April, compared with market expectations and July's 0.6% gain, as manufactured goods prices rebounded seasonally following summer sales, while energy and food prices also increased. The EU-harmonised annual inflation rate accelerated to 2.7% from 2.4%, while monthly HICP inflation rose to 0.8% from 0.6%.