05.06.202614:58:38UTC+00European Stocks Swing Lower

European equity indices were set to finish lower on Friday, weighed down by the ongoing standoff between the US and Iran and expectations of further interest rate hikes by major central banks. The Euro STOXX 50 slipped 0.4% to 6,080, while the STOXX Europe 600 surrendered earlier gains to end just below the flatline at 624.

The ECB is expected to raise interest rates next week, after fresh data showed relatively steady growth across the main Eurozone economies. Ireland was the key outlier, as volatile multinational flows exerted downward pressure on the bloc’s aggregate GDP.

In the US, odds of another Federal Reserve rate increase this year strengthened following a robust jobs report and limited prospects for a meaningful rebound in energy prices.

AI infrastructure stocks extended their declines after Broadcom’s subdued outlook prompted investors to rotate out of the sector. Infineon, Adyen, and Nokia each lost more than 7%. In the banking sector, UniCredit, BBVA, and ING fell by around 1% apiece.

Both the Euro STOXX 50 and the STOXX Europe 600 were on track to end the week with only marginal net moves.