The pan-European Stoxx 600 jumped 2.1%, on track for its biggest percentage gain in five weeks, while rate-sensitive sectors such as technology and real-estate surged more than 4% each.

A US Labor Department report showed consumer prices increased less than expected in October and underlying inflation appeared to have peaked, which would allow the country’s central bank to dial back its hefty interest rate hikes.

“It rocketed US futures higher and to top it off, weekly initial unemployment claims came in higher than expected. It is all moving in the direction that the Fed wants it to,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.

“Given just this data, it would allow the Fed to raise rates by only 50 basis points rather than 75 at the next meeting.”

The Euro Stoxx volatility index slipped to a 12-week low of 21.67 points.

The Stoxx 600 index is now eying its fourth straight week of gains, also supported by a better-than-expected earnings season.

Among big movers, AstraZeneca gained 3.6% as it raised its full-year adjusted earnings forecast after beating expectations for quarterly profit and revenue.

Allianz gained 3.5% as the German insurer gave a more optimistic full-year outlook after reporting a better-than-expected 17% rise in third-quarter net profit.

Germany’s Delivery Hero surged 13.7%, to top the Stoxx 600, after it reassured investors about achieving an adjusted core profit margin in 2023 and upgraded its outlook for this year.

Even as earnings were optimistic, investor sentiment was hurt after cryptocurrency exchange FTX’s chief said he was exploring all options for his firm after a deal with Binance collapsed.

“Steep declines in cryptos may have undermined sentiment toward more speculative assets as financial conditions continue to tighten,” Mark Haefele, chief investment officer at UBS Global Wealth Management, said.