(Reuters) – European stocks ended higher on Friday, flirting with record highs, while the dollar depreciated after Jerome Powell’s speech in which he said it was time to cut interest rates at the U.S. Federal Reserve (Fed).

In Paris, the CAC 40 gained 0.70% to 7,577.04 points. In Frankfurt, the Dax advanced 0.77% and in London, the FTSE 100 rose 0.48%.

The EuroStoxx 50 index gained 0.47%, the FTSEurofirst 300 0.47% and the Stoxx 600 0.51%.

Fed Chairman Jerome Powell said Friday that now is the time for the U.S. central bank to cut interest rates, citing growing risks to the jobs market and as inflation is on track to hit the 2% target.

“What he’s suggesting here is that if the labor market continues to weaken, we’re looking at a 50 basis point rate cut in September instead of 25,” said Peter Cardillo, chief economist at Spartan Capital Securities in New York.

Markets have fully priced in a 25 basis point US rate cut in September and are pricing in one at the Fed’s three remaining meetings this year, including a 50 basis point cut.

In bond markets, the prospect of a rate cut supported US Treasuries, preventing them from losing the gains they made in early August as investors feared a recession in the United States.

After Powell’s speech, the yield on 10-year U.S. bonds fell 5.7 basis points to 3.805%, from 3.862% late Thursday. The yield on 2-year bonds, which typically move in line with interest rate expectations, fell 6.7 basis points to 3.9427%, from 4.01% late Thursday.

In Europe, the dynamics are the same, the yield on 10-year German government bonds fell by 2.5 basis points to 2.219%. It was up by 1.5 basis points to 2.26% before the speech.

VALUES

BMW (+1.49%) sold more electric cars than Tesla in Europe for the first time last month, according to market research firm JATO Dynamics.

A WALL STREET

The S&P 500 jumped near an all-time high set in July after Jerome Powell’s statement.

The Dow Jones index gained 0.92% at mid-session, the broader Standard & Poor’s 500 gained 0.84% ​​and the Nasdaq Composite gained 1.11%.

CHANGES

The dollar fell after the US interest rate statement. It fell 0.76% against a basket of benchmark currencies, while the euro gained 1.15% to $1.1188.

OIL

Oil prices rose on Friday on a weaker dollar but were still expected to end the week lower as weak U.S. jobs data raised concerns about the health of the world’s top oil consumer and the resumption of ceasefire talks in Gaza eased supply worries.

Brent gained 2.1% to $78.87 per barrel, while US light crude (West Texas Intermediate, WTI) gained 2.2% to $74.72.

(Written by Kate Entringer)

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