European stocks fell as strong US jobs data raised interest rate fears

European stocks fell on Friday, weighed down by interest-sensitive sectors such as real estate and utilities, as a stronger-than-expected U.S. jobs report fueled concerns that the Federal Reserve will not cut interest rates.

The pan-European STOXX 600 index ended down 0.22% at 523.55 points, but posted its first weekly gain in three weeks.

The U.S. economy added more jobs than expected in May and annual wage growth accelerated again, underscoring the resilience of the labor market and reducing the likelihood that the central bank will start cutting interest rates in September.

“We believe the Fed wants to make cuts this year, but it’s unlikely to happen as soon as September,” said John Kershner, U.S. securities products and portfolio manager at Janus Henderson Investors.

Real estate led the sectoral losses with a nearly 3% drop, with German real estate group Vonovia falling 7.2% due to a downgrade by Morgan Stanley.

Helping to limit losses, healthcare stocks rose 0.5%, while the technology sector continued its strong gains with a gain of 0.4%.

In London, the Financial Times index fell 0.48% to 8,245.37 points.

In FRANKFURT, the DAX index fell 0.51% to 18,557.27 points.

In PARIS, the CAC-40 index lost 0.48% to 8,001.80 points.

In MILAN, the Ftse/Mib index fell 0.50% to 34,660.38 points.

In MADRID, the Ibex-35 index fell 0.34% to 11,404.90 points.

In LISBON, the PSI20 index fell 1.13% to 6,737.11 points.