- Sentiment turned positive after the benchmark U.S. 10-year Treasury yield retreated from more than three-month highs on Wednesday.
- Lawmakers reached a deal to increase the debt ceiling in the short-term, according to Senate Majority Leader Chuck Schumer.
European stocks rebounded on Thursday, continuing a week that has seen wild swings in global market sentiment and trading.
The pan-European Stoxx 600 closed up by 1.6%, with autos surging 3.2% to lead gains as all sectors and major bourses traded in positive territory.
The strong session for Europe on Thursday continues a trend of wild trading swings already seen in October. On Wednesday, negative sentiment characterized European market trades as U.S. Treasury yields briefly spiked, with inflation concerns weighing on global markets.
On Wall Street Thursday, stocks rallied as lawmakers reached a deal to increase the debt ceiling in the short-term, according to Senate Majority Leader Chuck Schumer. Stocks hit their highs of the session as Schumer announced on the Senate floor news of the compromise, which will avoid an unprecedented debt default for now.
On the data front, German industrial output slumped by more than expected in August as supply chain disruptions weighed on Europe's largest economy, official figures showed on Thursday. Output fell by 4% month-on-month following an increase of 1.3% in July, a vastly worse showing than the 0.4% decline forecast in a Reuters poll.
In terms of individual share price movement, French car parts maker Valeo jumped more than 5% after Citigroup upgraded the stock from "sell" to "neutral," on the back of recent downgrades to consensus expectations on industry production.
TeamViewer shares dropped a further 7% after a 25% plunge on Wednesday, on the back of weak quarterly earnings and a cut to full-year guidance.
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— CNBC's Tanaya Macheel contributed to this market report.