Source: Sharecast
The Stoxx 600 fell 0.41% to 641.09, Germany’s DAX declined 0.35% to 24,828.12 and France’s CAC 40 lost 0.47% to 8,338.81, while London’s FTSE 100 gained 0.27% to 10,600.37.
“The worst tech session since April of last year amid renewed concerns over stretched valuations dragged global equity markets lower although the Dow managed to regain its losses,” said IG chief technical analyst Axel Rudolph.
Investors reduced their exposure to technology and cyclical stocks following heavy overnight losses among semiconductor and artificial intelligence-linked companies.
Asian markets tumbled as chipmakers led declines in South Korea and Japan, with SK Hynix dropping more than 10%, Samsung falling sharply and the Nikkei sliding nearly 3% amid renewed concerns about global electronics demand.
“Major US indices are heading for a weekly loss as the broad technology sell-off gathered pace, with stretched AI valuations and concerns over future spending dragging chipmakers lower, while SpaceX's slide below its IPO price underscored the market's waning appetite for high-growth names,” Rudolph said.
“US data was mixed with unexpectedly rising import prices, housing starts soaring to their highest level in three months and US industrial output growth coming in slightly weaker than expected while consumer sentiment topped forecasts.”
Geopolitical tensions in the Middle East also kept oil prices elevated, adding to inflation concerns and fears that interest rates could remain higher for longer.
Brent crude futures were last up 2.96% on ICE at $86.72 per barrel, while the NYMEX quote for West Texas Intermediate climbed 3.24% to $81.51.
TickMill market strategy partner Patrick Munnelly said: “The session had a familiar shape. Middle East escalation continued to dominate the macro backdrop, supporting energy and utilities while weighing on rate-sensitive financials and consumer-facing names exposed to tourism and discretionary spending.
“The result was a narrow, sector-driven market rather than a broad move in either direction.”
Euro area inflation slows to three-month low
In economic news, Eurostat confirmed that eurozone inflation slowed to a three-month low of 2.8% in June from 3.2% in May, matching its preliminary estimate.
Energy inflation eased to 8.5% from 10.8%, while growth in food, alcohol and tobacco prices slowed to 1.5% from 1.9%.
Core inflation, excluding energy, food, alcohol and tobacco, fell to 2.4% from 2.6%.
Chip plays join global rout
On the equities front, European chip stocks declined with the broader sector, as ASML Holding fell 3.84%, ASM International dropped 4.04%, Infineon Technologies lost 1.62% and BE Semiconductor Industries declined 4.53%.
Lagercrantz Group and AAK slumped 7.09% and 13.03%, respectively, following quarterly results, while Tomra Systems surged 11.99% after posting better-than-expected results.
Reporting by Josh White for Sharecast.com.