Stocks in Euro Area Hit 16-week Low

European stocks closed sharply lower on Friday as risks to energy supply triggered a surge in their prices and risks of stagflation in European economies. The Eurozone's STOXX 50 fell 1.9% to the lowest since September, and the pan-European STOXX 600 dropped 1.72% to 574. ASML and SAP dropped more than 3.5% each to track the sharp losses for the global tech sector. Banks were also sharply lower as sovereign bonds extended their selloff, pressuring major lender balance sheets with UniCredit sinking nearly 4% and BNP Paribas, Intesa Sanpaolo, and Nordea dropping more than 2%. Hawkish signals from ECB policymakers yesterday drove rate traders to position for two hikes this year, with the first potentially being delivered as early as next week.

EU50 decreased to 5543.00 Index Points, the lowest since November 2025. Over the past 4 weeks, Euro Area Stock Market Index (EU50) lost 9.28%, and in the last 12 months, it increased 2.26%.

Both the STOXX 50 and the STOXX 600 erased early gains of 1% to trade 0.2% lower on Friday, as market volatility persisted and investors navigated growing uncertainty about the economic impact of the Middle East conflict. Oil prices reversed initial losses and moved higher again, while ongoing strikes in the region continued to fuel supply concerns. Technology and consumer cyclical stocks underperformed, with Roche (-1.7%), SAP (-1.6%), Hermes (-2.3%) declining and Maersk falling more than 4%. In contrast, Infineon stood out, rising 3% to lead the STOXX 600 after JPMorgan upgraded the stock, citing stronger demand tied to AI-driven power technologies. For the week, the STOXX 50 is down 1.7% and the STOXX 600 has fallen 2.1%, marking a third consecutive weekly decline.