European stock markets hit record highs on Friday, boosted by increasing market belief that the USA and eurozone will further cut interest rates in the coming months.

The Stoxx 600 index closed up by 0.5%, with newly released data reinforcing expectations of further interest rate cuts in the USA. The US Federal Reserve's key inflation and consumer spending indicators for August showed a slight increase, highlighting economic cooling.

Luxury goods companies like LVMH Group, Hermes International, and Kering Group continued to see their stock prices rise. The chemical and auto sectors also stood out as the best-performing sectors.

Europe's largest luxury goods stock LVMH gained additional momentum. According to the announcement, the company will invest in the designer outdoor brand Moncler SpA. This transaction will give the former a seat on the board of directors of this Italian company. Moncler's stock price briefly rose by 15%.

"This is one of the turning points this year," said David Kruk, trading manager at La Financiere de L’Echiquier in Paris, "I now feel like everyone will follow suit." He is referring to buying cyclical stocks.

In contrast, the medical sector, usually considered defensive stocks, performed poorly that day. Novo Nordisk's stock price fell after JPMorgan warned that the Danish pharmaceutical company's third-quarter performance might disappoint, as sales of its blockbuster weight-loss drug Wegovy fell short of expectations.

Although the slowdown in European economic growth has put pressure on the market, prospects of interest rate cuts have boosted stocks. Inflation rates in France and Spain have dropped to below 2%, fueling expectations of a faster pace of interest rate cuts by the European Central Bank.