European Stocks Extend Gains

European stocks closed with small changes on Monday, holding the losses from the previous week amid an adverse macroeconomic backdrop for major European sectors. The Euro STOXX 50 fell 0.1% to 6,455 and the STOXX Europe 600 closed flat at 654. Sovereign yields on longer maturity securities remained near multi-decade highs across major economies in the Eurozone, tracking those in the US to reflect concerns of higher deficit spending by Washington and concerns that the Federal Reserve may be complacent to high inflation. In the meantime, AI infrastructure stocks were lower ahead of Nvidia earnings after Wednesday's close, with Infineon and Siemens Energy dropping 3%, while ASML lost 1%. In turn, banks were mostly higher to trim losses from the earlier week.

European equities recovered from early losses to trade near the flat line Monday, with the STOXX 50 and broader STOXX 600 both unchanged at 6,460 and 654, respectively. Investors are awaiting US Treasury Secretary Scott Bessent’s press conference later today for details on Iran sanctions, while Fed Chair Kevin Warsh’s remarks at Jackson Hole on Friday could offer clues on the interest-rate outlook. European stocks ended lower last week as rising oil prices, higher bond yields and escalating Middle East tensions fueled inflation concerns and increased expectations for a more hawkish path from the ECB. Basic Resources led gains as gold prices rose on a weaker dollar, while Travel & Leisure also advanced. Energy shares slipped as the recent crude rally paused. The tech sector remained under pressure ahead of Nvidia’s earnings on Wednesday. In corporate news, Shell edged down 0.1% after the Financial Times reported that potential bidders have expressed interest in its US chemical assets.

European equities traded mostly lower on Monday, with the STOXX 50 falling 0.2% to 6,450 and the broader STOXX 600 slipping 0.1%, as investors adopted a cautious stance ahead of a busy week. The AI trade remained under pressure ahead of a key test from Nvidia’s earnings on Wednesday. Globally, investors are also awaiting US Treasury Secretary Scott Bessent’s press conference later today for further details on Iran sanctions, while Fed Chair Kevin Warsh’s comments at Jackson Hole on Friday are expected to provide clues on the outlook for interest rates. In Europe, the ECB is widely expected to raise interest rates by another 25 basis points in September, following its June tightening. In corporate news, Shell edged down 0.1% after the Financial Times reported that the company has attracted interest from potential bidders, including Exxon Mobil, for its US chemical assets.