- European stock markets are expected to open sharply lower Friday after Fed chief Jerome Powell raised the possibility of higher interest rates, potentially styming economic growth.

At 02:00 ET (06:00 GMT), the contract in Germany traded 0.6% lower, in France dropped 0.6% and the contract in the U.K. fell 0.6%. 

Hawkish Powell hits sentiment

Global equities, and stocks in Europe were no exception, have been boosted by increasing confidence that a peak in U.S. interest rates was in sight, after the left rates unchanged last week.

However, Fed Chair dished out a reality check on Thursday, warning that rate hikes were still under consideration as the central bank seeks to bring inflation totally under control.

"[The Fed] is committed to achieving a stance of monetary policy that is sufficiently restrictive to bring inflation down to 2% over time," Powell said.

"We are not confident that we have achieved such a stance. If it becomes appropriate to tighten policy further, we will not hesitate to do so."

Lagarde due to speak

Attention now turns to ECB President , who is due to speak later in the session. Investors will pore over her every word for clues of future monetary policy given the European Central Bank also paused its rate-hiking cycle late last month.

Lagarde has a tricky path to tread, because the latest eurozone business activity data, released at the start of the week, suggested there is a growing chance of a recession in the region, even while inflation remains above the ECB’s medium-term target.

Data released earlier Friday showed that stagnated in the U.K. in the third quarter, although rose 0.2% on the month in September, slightly better than the flat figure expected. 

offers dismal outlook

In the corporate sector, Richemont (SIX:) reported weaker than expected earnings as the luxury group said the rising cost of living, economic headwinds and geopolitical tensions were weighing on customers' spending.

Allianz (ETR:) posted a 30% fall in its third-quarter net profit, dragged down by claims from natural catastrophes, although the financial services company maintained its full-year profit outlook.

The European tech sector is likely to be hit hard Friday, after China’s biggest chipmaker, Semiconductor Manufacturing International Corp, reported a 80% slide in its quarterly profit amid worsening demand. 

Crude heading for sharp weekly drop

Oil prices rose Friday, but were still heading for a third straight week of steep losses on persistent concerns over slowing global demand and resurgent fears of rising U.S. interest rates. 

By 02:00 ET, the futures traded 0.4% higher at $76.01 a barrel, while the contract climbed 0.4% to $80.36 a barrel. 

Both benchmarks are currently down over 5% this week, and on course for the longest weekly losing streak since a four-week drop from mid-April to early May.

Additionally, fell 0.5% to $1,960.40/oz, while traded 0.1% lower at 1.0662.