(Bloomberg) -- European equities rose Thursday, rebounding from a three-week low and trimming their weekly declines in broad-based gains as a recent surge in bond yields cooled.

The Stoxx 600 Index advanced 0.6% by the close in London, with almost all sectors advancing, led higher by real estate and telecom stocks. On Wednesday, the benchmark posted its biggest one-day slide in over a month.

Renewables stocks were lifted by a fresh focus on M&A after Brookfield announced it’s in exclusive talks to acquire a majority stake in France’s Neoen SA.

Treasury yields dropped after a report showed that the US grew at a slower pace in the first quarter, fueling speculation the Federal Reserve will have room to cut rates this year. The data comes before Friday’s release of the Fed’s preferred price gauge.

Europe’s main regional index is still heading for its second weekly decline, with sentiment hit in earlier sessions by the jump in bond yields. A better-than-expected earnings season and optimism that the European Central Bank will start cutting rates next month have helped the benchmark stay on track for gains in May.

The market’s focus is now on a set of inflation reports from the US and Europe before the week is out that investors will follow to assess the monetary policy outlook. Numbers out today showed Spanish inflation quickened for a third month.

“The Treasury market has slowed the hunt for further records on the stock market as the spotlight remains on inflation data and the markets are shedding expectations of interest rate cuts,” said Guillermo Hernandez Sampere, head of trading at asset manager MPPM. “A major correction does not seem very likely due to the continued robust economic environment.”

For more on equity markets:

  • Beware of a Market Trading at All-Time Highs: Taking Stock
  • M&A Watch Europe: Neoen, Golden Goose, IDS, Anglo American, BHP
  • The UK-China Stock Connect Program Now Needs a Reboot: ECM Watch
  • US Stock Futures Fall; UiPath, Salesforce Inc, Agilent Fall
  • Czech’s in the Mail: The London Rush

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--With assistance from Jan-Patrick Barnert.

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