European Stocks Rise 1.5%

European stocks advanced on Wednesday, as global markets keep a close eye on elevated bond yields and a lower-than-expected UK inflation print. The pan-European Stoxx 600 finished the day 1.5% higher. Miners, banks, and tech stocks led gains, while media stocks lagged the broader index.

Market Drivers

Investors are assessing elevated bond yields and inflationary pressures, as global government bonds continue to come under pressure. Yields on US Treasurys rose Tuesday with the 30-year Treasury yield above 5.19%, its highest level since 2007. Meanwhile, the benchmark 10-year yield climbed toward 4.69%. They pulled back from those levels on Wednesday, however.

UK Inflation

UK inflation eased to a lower-than-expected 2.8% in April, preliminary data from the Office for National Statistics showed on Wednesday. Economists polled by Reuters had expected the inflation rate to drop back to 3%, cooling from 3.3% in March, largely due to an energy price cap introduced by the UK's energy regulator Ofgem on April 1.

Earnings and Currency

Earnings come from Experian, with the credit and data analytics firm lining up a $1 billion share buyback program and forecasting organic revenue growth of 6% to 8% for fiscal 2027. The British pound was marginally lower against both the US dollar and the euro after the data print was released, while the yield on the benchmark 10-year gilt fell 5 basis points to 5.075%.

Key points

• The pan-European Stoxx 600 finished the day 1.5% higher.
• UK inflation eased to 2.8% in April, lower than expected.
• The 30-year Treasury yield rose above 5.19%, its highest level since 2007.
• Experian announced a $1 billion share buyback program.
• The British pound was marginally lower against the US dollar and euro.
• The yield on the benchmark 10-year gilt fell 5 basis points to 5.075%.