European equities advanced on Friday as easing government bond yields helped stabilise markets following a technology-led sell-off. The recovery put the STOXX Europe 600 on course for its strongest weekly performance since early August, although concerns about artificial intelligence (AI) investment, corporate debt and the outlook for interest rates continued to influence sentiment.
The STOXX Europe 600 rose around 0.5% to 0.6% during the session, putting it on track for a weekly gain of approximately 1.4%. France’s CAC 40 and Germany’s DAX also advanced, while London’s FTSE 100 lagged behind its continental peers.
The rebound followed a difficult period for global technology shares, with investors reassessing the financing structures supporting the expansion of AI infrastructure. Concerns about the amount of debt being used to fund data centres and computing capacity have raised questions about whether future earnings and cash flows will justify the scale of investment.
Fears surrounding heavily indebted data centre operator CoreWeave contributed to the previous session’s technology sell-off. The concerns extended beyond individual companies, prompting investors to reassess valuations across semiconductor manufacturers, technology suppliers and other businesses exposed to AI spending.
Lower government bond yields helped support Friday’s recovery. Investors had moved towards US Treasuries and other government debt amid concerns about financial risks in the technology sector, contributing to a decline in yields. The move provided some relief for equities, particularly growth stocks whose valuations can be sensitive to borrowing costs.
European technology shares were among the beneficiaries of the recovery. Semiconductor-related companies gained as investors returned to selected stocks following the recent sell-off.
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