The Stoxx 600 index closed at a record 652.84 points on Friday, rising 0.69% in a session drained of liquidity by the early closure of US markets for Independence Day. The advance capped a week in which the pan-European benchmark gained 2.68%, with Frankfurt’s DAX surging 4.57% and London’s FTSE 100 adding 1.57%. The moves were amplified by thin volumes, but the underlying driver was a recalibration of interest-rate expectations after official data showed US payrolls grew less than forecast in June.

Viewed from London and Frankfurt, the weaker American labour-market report combined with a retreat in oil prices to reduce bets that the Federal Reserve would raise rates at its July meeting. Brent crude traded below $72 a barrel, easing concerns that energy costs would feed into core inflation. The dollar index was little changed near 100.8, while the euro edged up to $1.1436. In Asian trading, South Korean chipmakers recovered some ground, lifting regional benchmarks by 2%, as investors awaited the next earnings season to gauge whether heavy spending on artificial-intelligence infrastructure would translate into profits.

The rotation out of highly valued technology names benefited cyclical sectors across Europe. Industrial, banking and financial-services stocks led weekly gains, while the defence subsector rose 0.63% on the day as markets assessed the impact of intensified Russian strikes on Ukraine. Siemens shares climbed 2.6% in Frankfurt after Kepler Cheuvreux lifted its recommendation to “buy”. In São Paulo, interest-rate futures fell sharply, with the January 2031 DI contract dropping to 14.385%, after data showed Brazilian industrial production contracted 0.2% in May against expectations of a 0.3% expansion. Comments from a senior Treasury official signalling readiness to buy back inflation-linked bonds added to the downward pressure on yields.

With US markets closed and liquidity expected to remain thin into Monday, currency traders in Tokyo flagged the risk of intervention by the Bank of Japan to support the yen, which was steady around 161.3 per dollar. The next factual milestones are the start of the US corporate earnings season, which will test the valuation of AI-exposed companies, and the Federal Reserve’s policy meeting later this month, where officials will weigh the cooling labour market against still-elevated inflation readings.