European Stocks Fall Led by ASM, Luxury Stocks

The Stoxx 50 fell 0.7% on Wednesday, led lower by ASML Holding which dropped more than 4% after issuing a weaker than expected outlook for the current quarter despite raising its full year sales forecast. The company expects second quarter revenue between €8.4 billion and €9 billion, below analyst expectations. The broader Stoxx 600 slipped 0.4% as weakness in the luxury sector weighed on sentiment. Hermès shares plunged 8% as Middle East tensions hit sales growth, while Kering dropped 9% after reporting disappointing results at Gucci, partly attributing the slowdown to the conflict. Investors remained cautious as they awaited clearer developments in the Middle East, with markets watching for confirmation of renewed talks and a possible extension of the ceasefire.

The STOXX 50 fell 0.2% and the STOXX 600 traded around the flatline on Wednesday, as investors awaited further developments in the Middle East and assessed a fresh batch of corporate earnings from major companies. Reports indicated that the US and Iran are working toward a second round of peace talks in the coming days, although a naval blockade of the Strait of Hormuz remains in place. On the earnings front, shares of ASML Holding slipped 0.3%, despite the company raising its full-year sales forecast on the back of strong global demand for AI-related technologies. Meanwhile, the luxury sector was under heavy pressure, with Hermes plunging 13% after the company said activity was “significantly affected” by the situation in the Middle East, while Kering fell nearly 8% following a decline in Gucci sales in Q1. LVMH was also down more than 1%, Richemont lost 2.5% and Moncler decreased 2.4%.

European equity markets were set to open slightly lower on Wednesday as the rally fueled by optimism over US-Iran diplomacy paused. Washington and Tehran are reportedly working to schedule a second round of talks before the current two-week ceasefire expires, supporting hopes for a resolution to the conflict and a reopening of the Strait of Hormuz. Oil prices eased on expectations of a potential agreement, helping to alleviate inflationary pressures and growth concerns that have recently weighed on global equities. Meanwhile, investors will turn to French inflation data and Eurozone industrial production figures for further direction. On the corporate front, Dutch chipmaker ASML lifted its 2026 sales guidance after surpassing first-quarter revenue and profit estimates, supported by strong AI-driven demand. Euro Stoxx 50 and Stoxx 600 futures were both down around 0.3% in premarket trading.