European stocks rebound from two-month lows

European stocks rose on Thursday as investors awaited regional inflation data for clues on how much longer the European Central Bank will hike interest rates, with hopes that the U.S. will avoid a debt default aiding the sentiment.

The pan-European STOXX 600 index (.STOXX) rose 0.9% after closing at a two-month low in the previous session.

US House of Representatives on Wednesday passed the bill to suspend the $31.4 trillion debt ceiling and avoid a catastrophic default, with majority support from both Democrats and Republicans, stoking optimism that it can move through the Senate before the weekend, reported Reuters.

Readings on euro zone inflation, due later, are expected to show a further easing of price pressure in May. Lower-than-expected inflation data this week from Spain, France and Germany spurred hopes that interest rates will peak in September, compared with the previous forecast of December.