Investing.com - European stock markets retreated Friday, closing the week on a negative note amid uncertainty over the state of the global economy.
At 07:10 ET (11:10 GMT), the DAX index in Germany dropped 0.8%, the CAC 40 in France slipped 0.3% and the FTSE 100 in the UK fell 0.6%.
Central bank decisions to digest
Investors are digesting mixed signals from the U.S. Federal Reserve this week, as well as persistent threats of more trade tariffs and growing concerns over a U.S. economic slowdown.
On top of this, there were a number of central bank meetings in Europe for investors to study.
The Swiss National Bank cut interest rates by 25 basis points, while the Bank of England and Sweden’s Riksbank held rates unchanged.
Attention will also be on the passage of legislation in Germany to create a hefty fund for infrastructure and to allow higher spending on defence.
The plan was approved this week in the lower house Bundestag, and heads to the Bundesrat upper house later in the session.
Fire closes Heathrow airport
In the corporate sector, major European airline stocks fell on Friday after the region’s busiest airport Heathrow said it would remain closed on the day due to a fire at a nearby electrical substation that supplies its power.
Shares in British Airways’ parent company International Consolidated Airlines (LON:ICAG) fell 0.7%, while Wizz Air Holdings (LON:WIZZ) dropped 1.5%, Air France KLM (EPA:AIRF) declined 1.4%, EasyJet (LON:EZJ) slipped 0.6% and Deutsche Lufthansa (ETR:LHAG) fell 1.3% after markets opened on Friday.
Heathrow warned that "significant disruption" is expected in the coming days, with flight tracking site Flightradar24 suggesting that more than 1,300 flights to and from the airport in west London may be cancelled today.
Elsewhere, Salzgitter (ETR:SZGG) stock fell 0.2% after the German steel group blamed its weak sales outlook on the stagnation of the German economy, as well as escalating trade tensions between the United States and its trading partners.
JD Wetherspoon (LON:JDW) stock fell 8.2% after the pub chain reported higher revenue for the first half of its financial year, but rising costs, particularly in wages and utilities, weighed on profitability.
Crude gains with supply set to tighten
Oil prices slipped Friday, but were on course for gains for the second consecutive week, as fresh U.S. sanctions against Iran and plans to cut production by a group of major producers pointed to tighter supplies in the coming months.
At 07:10 ET, Brent crude futures fell 0.5% to $71.61 a barrel, and U.S. West Texas Intermediate crude dropped 0.5% to $67.73 a barrel.
On a weekly basis, both contacts were on track to register gains of around 2%, their biggest weekly gains since the first week of 2025.
The U.S. on Thursday issued new sanctions against Iran as part of its goal to deter Tehran from developing a nuclear weapon, targeting an independent Chinese refinery and several oil tankers - which Washington claims are a part of Iran’s “shadow fleet” of vessels.
Additionally, the Organization of Petroleum Exporting Countries and allies, known as OPEC+, said that seven of its member states will cut output to make up for recent production increases.
The plan will entail monthly cuts of between 189,000 and 435,000 barrels per day, and will last until June 2026.