European stock markets moved higher on Friday, propelled by a string of corporate results that generally beat expectations and economic data that point to a tentative recovery in parts of the region, even as elevated geopolitical risks and developments in U.S. policy continued to weigh on investor sentiment.
By 04:30 ET (09:30 GMT) the benchmark indexes showed broad-based gains: Germany's DAX rose 1.0%, France's CAC 40 added 0.5% and the U.K.'s FTSE 100 ticked up 0.2%.
Macro backdrop - modest eurozone uplift
Economic releases supported risk appetite in Europe. France's economy expanded in the fourth quarter of 2025, though the pace eased to 0.2% from 0.5% in the third quarter after a strong rebound during the summer. Over the whole of 2025, GDP advanced 0.9%, outpacing the 0.7% growth assumption that was used in government budget planning.
Meanwhile, Germany's labour market data signalled limited momentum. The number of unemployed in January remained unchanged from December at 2.976 million, leaving the jobless rate steady at 6.3% on a seasonally adjusted basis. The flat reading underlines a slow recovery in Europe's largest economy.
Against this backdrop, markets are positioned for the European Central Bank to hold interest rates steady at next week's meeting, reflecting inflation close to target and tentative signs of regional economic improvement.
Geopolitical and U.S. policy drivers
Geopolitical tensions remained elevated, with reports that the White House is considering additional strikes on Iran while a U.S. naval armada moves into the region. Separately, U.S. President Donald Trump signed an executive order declaring a national emergency and establishing a process to impose tariffs on goods from countries that sell or otherwise provide oil to Cuba.
On the U.S. policy front, President Trump said late on Thursday he would announce his nomination for the next Federal Reserve Chair later in the session. Media reports cited in markets suggested former Federal Reserve Governor Kevin Warsh was the leading contender. That development was linked to a stronger U.S. dollar in trading, an outcome that has direct implications for dollar-priced commodities.
Corporate earnings - mixed but supportive overall
Company results across Europe delivered a generally positive tone. German sportswear group Adidas (ETR:ADSGN) reported record sales for 2025 and announced a €1 billion stock buyback programme, moves that drew investor attention.
Swiss watchmaker Swatch (SIX:UHR) said second-half sales rose 4.7% at constant exchange rates, although it also reported that profit fell sharply in 2025.
Spain's Caixabank (BME:CABK) reported net profit of €5.89 billion for 2025, up 1.8% year-on-year. The bank delivered a 17.5% return on tangible equity, reduced its bad loan ratio to a record low of 2.1% and raised its dividend by 15%.
Across the Atlantic, Apple (NASDAQ:AAPL) posted better-than-expected results for its fiscal first quarter, the holiday quarter, reporting stronger profit and revenue and its best quarterly iPhone sales growth in over four years. Those results contributed to a risk-on tone in global equity markets.
Commodities - oil and gold retreat from peaks
Oil prices eased on Friday but remained poised for substantial weekly gains amid concerns that a U.S. strike on Iran could disrupt supply from a major Middle Eastern producer. Brent futures fell 0.8% to $69.03 a barrel and U.S. West Texas Intermediate futures declined 0.8% to $64.87 a barrel. Despite the retreat, both contracts were set for roughly 5% weekly gains and were on track to post their first monthly rise in six months, with Brent up more than 16% in the month and WTI heading for a rise of over 14% in January.
Gold prices pulled back sharply from record levels after news that President Trump was due to announce his nominee for the Fed chair. The frontrunner's perceived stance influenced expectations for U.S. monetary policy, nudging the dollar higher and pressuring dollar-denominated commodities. Spot gold slid 5.4% to $5,061.59 an ounce, while April gold futures fell 6.4% to $5,024.68 an ounce. Nevertheless, the metal has gained over 20% so far in January and was set to record a sixth consecutive monthly advance, the largest monthly gain since 1982.
Market implications
The day's moves reflected a combination of corporate resilience and macroeconomic moderation. Positive corporate releases supported equities, particularly in consumer discretionary and banking sectors, while geopolitical developments and U.S. policy actions continued to drive volatility in energy and commodity markets. Investors remain attentive to upcoming central bank decisions and further developments in U.S. policy and Middle East tensions.
Looking ahead, the trajectory of oil and gold - both sensitive to geopolitical risk and dollar moves - and any confirmation of the U.S. Fed chair nomination are likely to be important near-term market drivers.