European stocks rebound from two-month lows with inflation data in focus

Shares of Heidelberg Materials climbed 2% after J.P.Morgan upgraded the cement maker's stock rating to "overweight", calling it a "big opportunity" as the sector looks to attract more investors on decarbonisation efforts.

European stocks rose on Thursday on hopes the Federal Reserve could keep interest rates steady this month, while the passage of a U.S. bill through the House of Representatives brought relief to investors worried about a potential debt default.

The pan-European STOXX 600 index rose 0.7% after closing at a two-month low in the previous session. U.S. House of Representatives on Wednesday passed the bill to suspend the $31.4 trillion debt ceiling and avoid a catastrophic default, with market focus now turning to the Senate.

Some Fed officials pointed towards an interest rate hike "skip" in June, prompting a quick reversal of market expectations for another hike as the U.S. central bank weighs the value of caution against still-strong inflation data. Readings on euro zone inflation in May and unemployment rate in April are due later in the day.

Among single stocks, Remy Cointreau rose 1.4% as the French spirits group reported a higher-than-expected rise in operating profit for its 2022/23 fiscal year and stuck to its cautious prospects for this year. Shares of Heidelberg Materials climbed 2% after J.P.Morgan upgraded the cement maker's stock rating to "overweight", calling it a "big opportunity" as the sector looks to attract more investors on decarbonisation efforts.