Europe's STOXX 600 closes at two-week high; Randstad soars

In London, British inflation cooled by more than expected in June, in a boost for new Prime Minister Andy Burnham as he seeks to ease living costs.

Tech stocks on the STOXX 600 .SX8P dipped 0.5% ahead of quarterly results from Alphabet GOOGL.O and Tesla TSLA.O in the U.S. after markets close. The results will be watched for clues on whether the rally in AI-related stocks still has room to run.

The sector has seen notable swings recently as investors balance AI-led growth against increasingly stretched valuations, particularly among chip stocks, which have posted an eye-popping rally this year on Wall Street and Asian markets.

"A rotation away from tech has resulted in a better day for European markets overall, which continue to defy the strength in oil. The focus now shifts to the U.S. as the first of the hyperscalers, Alphabet, reports earnings, offering some relief from what appears to be a fast-deteriorating situation in the Middle East," said Chris Beauchamp, chief market analyst at investing platform IG.