European stock markets experienced a slight decline on Friday as soaring government bond yields exerted pressure on equities. Investors now look to upcoming U.S. jobs data to glean insights into the Federal Reserve’s future interest rate strategy.

The pan-European STOXX 600 dipped by 0.1% at 0941 GMT but maintained its position for the strongest weekly gain in a month. German 10-year bund yields climbed to their highest level in six months, impacting utilities, which fell by 0.9% as they often trade as bond proxies.

Market volatility is expected to persist in the weeks ahead, driven by both interest rates and political developments. The U.S. jobs report, expected to reveal December’s job growth moderation, will influence the Fed’s cautious approach to rate adjustments this year, sustaining attention on economic indicators.

Tariffs continue to be a source of volatility for European equities, although much of the impact is believed to be priced into the markets already. The food and beverages sector struggled, with significant losses seen in Pernod Ricard and JDE Peet’s, while Novo Nordisk’s gains helped mitigate some declines.

Telecommunications sectors showed resilience, particularly Deutsche Telekom, which saw a 1.5% increase following UBS’s recommendation upgrade. Meanwhile, economic data showed Sweden’s economy grew by 1.4% in November, and Norway experienced greater-than-expected deceleration in core inflation for December.

In Switzerland, unemployment rose slightly to 2.8% in December. France’s Ubisoft saw a significant drop of 7.1% in its stock value after announcing delays in its latest Assassin’s Creed release and revising its financial outlook for lower third-quarter and annual net bookings.

In contrast, Ambu A/S led the gains on the pan-European index, surging 13.2% on releasing preliminary strong first-quarter results and an optimistic full-year forecast, highlighting varied responses in specific sectors across the European market landscape.

(With inputs from agencies.)