According to Jinshi Data, the European Stoxx 600 index closed up 0.3% on August 29 and is now less than 1% away from its record high in May. European stocks have recovered their losses since August as investors bet that the Federal Reserve is ready to cut interest rates and the economy can be spared from recession.

This week, the market is focused on Nvidia's earnings report, which will be released after the market closes, and inflation data. Neil Birrell, chief investment officer of Premier Miton Investors, said that Nvidia's earnings report is highly anticipated and the stock market will be driven by the technology sector in the coming days.

Seasonality also worked against European stock indices, which have fallen an average of about 1.9% in September over the past five years, the worst month for declines.