European Stock Market Bounces Back with Optimistic Trade Deal Prospects and Impressive Earnings

European shares experienced a significant rebound on Thursday, with the STOXX 600 index climbing 0.7%, following four days of declines. This uplift was largely driven by strong quarterly performances from Switzerland's ABB and renewed optimism surrounding a potential trade agreement between the United States and the European Union.

Germany's DAX, heavily impacted by trade, led the region with a 1% increase. ABB's shares hit a 7.2% rise after the company reported a record order intake, powered by U.S. demand and products for AI-utilized data centers. Rivals Siemens and Schneider Electric also benefitted, seeing their shares rise by 2.9% and 5.5% respectively, contributing to a new peak in the European industrials index.

Chipmakers like ASML regained ground after previous losses, influenced by TSMC's record-breaking Q2 profit. As trade talks progress, President Trump's potential EU deal by August 1 and his stance on Federal Reserve policy continue to influence market sentiments. Meanwhile, investors are closely watching for developments in U.S.-EU negotiations and how EU's response might impact American trade.

(With inputs from agencies.)