This is CNBC's live blog covering European markets.

European markets were higher Friday as traders continue to digest U.S. data. Cooling inflation raised expectations that the Federal Reserve will pause its current rate-hiking cycle.

The pan-European Stoxx 600 index was up 0.6% in mid-afternoon trade, with most sectors trading in positive territory. Banking stocks led gains, up 3% after results from U.S. banks JPMorgan, Citigroup and Wells Fargo beat estimates.

Utilities dropped 1.5% to lead losses.

European stock markets closed higher Thursday in a fourth consecutive uptick.

The March producer price index, a measure of prices paid by companies and often a good indicator of U.S. consumer inflation, declined by 0.5% from the previous month.

U.S. stocks were down slightly following a weak retail sales report, while Asia-Pacific markets largely rose on Friday.

Stocks on the move: Dechra Pharm still leads, Fortum drops

Dechra Pharmaceuticals, the British maker of veterinary products, remained sharply higher in afternoon trade on news it is in talks over a £4.63 billion ($5.8 billion) private equity takeover. Its stock was up 33.5% at 3:30 p.m. London time.

Other strong performers included Sweden's AAK, a producer of vegetable oils and fats, which traded 9.1% higher after reporting record operating profit in the first quarter.

And European property group Aroundtown continued to nudge higher from its April 5 record low, rising 5.5%. The stock has taken a battering this year as investors fret over its debt pile and the impact of higher rates along with wider economic uncertainty.

By sector, European banks were the top performers, up 2.9%.

At the bottom of the Stoxx 600 index, Finnish state-owned electricity firm Fortum fell 4.6% amid its dispute with Danish wind turbine manufacturer Vesta.

— Jenni Reid

U.S. stocks open lower Friday

The Dow Jones Industrial Average dipped Friday as investors assessed stronger-than-expected corporate earnings, as well as a weak retail sales report.

The 30-stock Dow fell 18 points, or 0.05%. The S&P 500 pulled back by 0.1%, and the Nasdaq Composite lost 0.4%.

— Sarah Min

Fears mount of a downturn in European commercial real estate

Concerns are mounting around the health of Europe's commercial real estate market, with some investors questioning whether it could be the next sector to blow.

Following the March banking crises, fears have arisen over a so-called "doom loop," in which a potential bank run could trigger a downturn in the property sector.

European funds that invested directly in real estate recorded outflows of £172 million ($215.4 million) in February, according to Morningstar Direct data.

Analysts at Citi now see real estate stocks falling by 20%-40% by next year. Capital Economics increased its forecast for a peak-to-trough euro zone property sector correction from 12% to 20%, with offices expected to come off the worst.

— Karen Gilchrist

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Stocks on the move: AAK up 9%, Fortum down 4%

Shares of vegetable oil and fats producer AAK were up 9% after the Swedish company reported record-high operating profits for the first quarter. AAK shares are on track for their best day in almost 15 years, according to Reuters, following the 43% profit increase from the previous year.

Finnish electric services company Fortum fell to the bottom of the pan-European Stoxx 600 index after shares dropped 4.3%. Fortum announced it had elected a new board of directors Thursday.

— Hannah Ward-Glenton

Dechra Pharmaceuticals shares up 38% after takeover talks

Shares of British veterinary pharmaceuticals producer Dechra soared 38% at the start of trading after news of a possible takeover.

The company announced Thursday it had entered talks with Swedish private equity group EQT to discuss a possible all-cash, £4.63 billion ($5.8 billion) deal.

If the deal goes ahead, shareholders would receive £40.70 per ordinary share in cash.

Dechra said EQT has until May 11 to announce a firm intention to make an offer.

— Hannah Ward-Glenton

CNBC Pro: 'A hidden gem': Barclays names 3 stocks to buy in an overlooked area of health care

There's a global investing opportunity in a corner of health care that is both "significant and underappreciated," according to Barclays.

It shares stock picks that include a "hidden jewel" and a "unique" player.

CNBC Pro subscribers can read more here.

— Weizhen Tan

U.S. dollar index dips to mark to the lowest in nearly a year

The U.S. dollar index fell to roughly a one-year low and traded at 100.8 as more signs of cooling inflation showed overnight, signaling the Federal Reserve may pause its tightening cycle.

The dollar index fell below the 100 mark in April 2022 and traded at 100.6 on April 21, 2022, Refinitiv data showed.

The March producer price index fell by 0.5% month-on-month and its core reading, which strips out food and energy prices, fell 0.1%, against expectations for the reading to rise 0.2%.

— Jihye Lee

Wells Fargo dips in extended trading as investors look to Friday's bank earnings

Wells Fargo slipped 1% in extended trading as investors readied for a batch of earnings reports from major banks.

The bank is set to report earnings before the bell Friday along with JPMorgan and Citi. JPMorgan was down 0.2% after hours, while Citi was up 0.2%.

— Alex Harring

U.S. producer price index unexpectedly falls in March

The producer price index, a gauge of wholesale inflation, fell 0.5% month over month in March — another sign that U.S. inflation may be cooling. Economists polled by Dow Jones expected PPI to remain unchanged from February.

Core PPI, which strips out food and energy prices, fell 0.1%, while economists had forecast a 0.2% increase.

— Fred Imbert

European markets: The opening calls

European stock markets are set to open higher, according to IG data. The FTSE will rise to 7,855.7 with a 10.7-point gain, Germany's DAX will be up 41.5 points to reach 15,766.2, and France's CAC index will reach 7,499.9, thanks to a 15.6-point increase

— Hannah Ward-Glenton