The global confidence that a U.S. debt default would be avoided should help European stock markets on Friday, but worries about future growth still exist.

The global confidence that a U.S. debt default would be avoided should help European stock markets on Friday, but worries about future growth still exist.

The S&P 500 and Nasdaq indexes on Wall Street finished the day at their best levels since August 2022.

This comes as leading Republican in Congress Kevin McCarthy expressed optimism that a deal to raise the U.S. debt ceiling, keeping the nation from defaulting on its debts, may be reached soon.

This optimism is anticipated to last through Friday in Europe, adding to the upbeat atmosphere created by a large number of prominent European corporations reporting better-than-anticipated first-quarter earnings.

The European Central Bank increased interest rates earlier this month, and more increases are inevitable. On Thursday, ECB Vice President Luis de Guindos expressed his concern about the increasing inflation in the service sector.

German producer prices increased 0.3% in April, according to statistics released earlier on Friday. This represents an annual increase of 4.1%, which is more than double the ECB's desired inflation rate.

Oil prices increased on Friday as traders repurchased heavily discounted markets by capitalising on the optimism around a likely increase in the U.S. debt ceiling.

The oil market is expected to climb almost 3% this week, which would be the highest weekly increase since early April and end a streak of four consecutive weeks of losses.

The immediate picture is still bleak, though, as rising inflation figures suggest further interest rate increases from central banks around the world and as negative economic data from China, the biggest consumer of crude oil, continues to surface.

(investing.com, reuters.com)