European stocks eke out weekly gain as oil, yields ease; SpaceX spectrum deal hits telecoms

European stocks recovered on Friday as oil prices and bond yields eased on hopes of a pause in the Middle East war, while telecom stocks slid after SpaceX's deal to ‌acquire a nationwide spectrum portfolio in the US caused ripples across the sector. The pan-European STOXX 600 closed 1% higher on Friday, wiping out its weekly fall. The index closed at a nearly four-month low on Thursday as a surge in oil prices and bond yields pushed investors away from risky assets.

However, oil ‌prices dipped more than 1% on Friday after US President Donald Trump said his country would not attack Iran before the midterm elections next month. The ‌comments offered relief to investors worried about elevated oil prices sparking inflationary pressures and forcing major central banks to aggressively tighten monetary policy.

Euro zone bond yields also pulled back after touching multi-decade highs this week, with fiscal concerns in France ahead of next year's presidential election compounding pressures for French bonds. "Upward pressure on bond yields will likely stop only if: rising rates start ⁠weighing on ​growth momentum, higher borrowing costs lead to ⁠financial stress or there are clear signs of inflation cooling," said analysts at BofA Global Research.

"European equities have remained largely unfazed by the increase in French political and fiscal risk. ⁠The risk premium priced into equities has remained supported by strong global growth and the earnings upgrades fuelled by the AI investment boom." EU-CHINA DEAL BOOSTS CARMAKERS

Meanwhile, the European Union ​and China agreed to halve Chinese exports of hybrid and plug-in hybrid vehicles to the EU, improve EU access to China's market and ⁠ease Chinese licencing of rare-earth exports, European Trade Commissioner Maros Sefcovic said. European autos jumped 1.5%, marking their sharpest daily gain in over three weeks.

Most sectors on the STOXX 600 ended higher, barring ⁠the telecom ​index, which stumbled 2.9% to an eight-month low. Deutsche Telekom fell 7.9%, marking its steepest one-day fall in more than three years, after SpaceX struck a deal to acquire a nationwide low-band spectrum portfolio in the US, mounting a direct, orbital challenge to legacy wireless giants across the country.

Deutsche Telekom holds ⁠a 54% stake in T-Mobile US, which slid 12% in US afternoon trading. Britain's Vodafone and Spain's Telefonica dipped over 4.5% each, while France's Orange fell 2.5%.

Investors ⁠are now awaiting the third-quarter earnings ⁠season to gauge how companies are performing against a backdrop of higher inflation and interest rates. Analysts expect STOXX 600 companies to post a third-quarter profit growth of 21% from a year earlier, according to LSEG data, with energy ‌and basic material firms ‌seen providing the biggest boost.