European stocks reverse course to end higher after cooler-than-expected U.S. inflation print

LONDON — European stocks reversed course to close higher on Friday as investors reacted to a delayed U.S. inflation print and a flurry of corporate earnings reports.

The pan-European Stoxx 600 was 0.2% higher at the end of Friday’s session, paring earlier losses, with major bourses and sectors broadly in positive territory. London’s FTSE 100 extended gains that saw it close at a record high on Thursday, with the U.K. index ending Friday up 0.7%.

Across the Atlantic, the U.S. Bureau of Labor Statistics on Friday said that America’s annual inflation rate hit a lower-than-expected 3% in September. U.S. stocks rose following the print, which had grown in importance due to it being the only federal data allowed to be released during the ongoing government shutdown.

With earnings season well underway, investors also monitored a swathe of quarterly reports out of Europe. Saab, ENI, Sanofi, Volvo Group, and Porsche were among the companies updating shareholders on their financial performance.

Swedish defense contractor Saab was among the major movers on Friday, closing the session up 6.1% after the firm upgraded its 2025 sales guidance, riding the tailwinds of Europe’s defense boom.

U.K. lender NatWest filed early in the day. Its pre-tax profits reached £2.18 billion ($2.9 billion) in the third quarter, comfortably beating analyst expectations of £1.84 billion.

The London-listed bank’s quarterly results showed net interest income came in at £3.3 billion, in line with consensus forecasts, according to LSEG. The lender — which raised its full-year guidance for 2025 income to £16.3 billion, up from just over £16 billion — saw its shares rise 0.5%.

Elsewhere, the European Union and U.S. announced complementary sanctions packages targeting Russia, in what could be a high point in an otherwise thorny relationship for the two states this year. 

Investors will also be watching tariff news coming from Canada, after an ad featuring former U.S. President Ronald Reagan speaking negatively about tariffs, aired by the Ontario provincial government, sparked backlash from President Donald Trump. Trump said on Thursday night that he was terminating all trade negotiations with Canada. 

South Korea’s Kospi hit a record high on Friday, amid regional gains after the White House said that U.S. President Donald Trump and China’s President Xi Jinping were set to hold talks next week. 

— CNBC’s Jeff Cox and Hugh Leask contributed to this report.