(Bloomberg) -- European equities edged lower on Thursday as investors held off from making big bets ahead of US jobs data, overshadowing the boost from a rally in UBS Group AG that was driven by the biggest-ever quarterly profit for a bank.

The Stoxx Europe 600 was down 0.2% by the close, capping its first monthly decline since May. It gained nearly 0.5% earlier in the day, when figures showed the Federal Reserve’s preferred measure of underlying inflation posted the smallest back-to-back increases since late 2020, encouraging a burst of consumer spending and feeding growing expectations that the economy can avert a recession.

UBS jumped 6.0%, driving an outperformance in the broader financial services sector. Real estate stocks also gained, while consumer products underperformed. 

The big market mover will be the US jobs report on Friday, “when we’ll see if some sort of Goldilocks macro environment is possible moving forward,” said Kevin Thozet, a member of the investment committee at Carmignac Gestion in Paris.

The mood had earlier been muted by data showing a drop in China’s manufacturing activity for a fifth consecutive month, though an improvement in the new orders gauge encouraged hopes that the worst of the slump is past. Meanwhile, euro-area inflation stopped slowing in August, presenting European Central Bank officials with a quandary as they weigh whether pressures are too persistent to risk a pause in interest-rate hiking.

European stocks are set for their worst monthly decline since May amid concerns that interest rates will stay higher for longer, as well as worries about the health of China’s economy. 

Among other individual movers, Pernod Ricard SA dropped as it expects sales in the US to decline in the first quarter. 

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--With assistance from Sagarika Jaisinghani and Julien Ponthus.

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