European Stocks Lower as Tech Weighs

European stocks traded lower on Friday, with the STOXX 50 slipping 0.2% and the STOXX 600 declining 0.5%, as a renewed sell-off in technology stocks and mounting concerns over elevated AI-related valuations weighed on global market sentiment. Reports that both Apple and Microsoft plan to raise prices for their products, while OpenAI is considering delaying its IPO until 2027, added to investor caution. The technology sector was among the worst performers, with ASML Holding (-1.3%), Infineon Technologies (-3.3%), and STMicroelectronics (-3.3%) posting notable losses. Elsewhere, Siemens Energy (-2.9%), Leonardo (-2.0%), and Safran (-1.3%) also traded lower. In contrast, Hermes (+1.2%), Unilever (+0.6%), and Iberdrola (+0.7%) booked gains, providing some support to the broader market. For the week so far, the STOXX 50 is down 0.3%, while the STOXX 600 remains up 0.7%.

European equity markets were set to open lower on Friday, tracking losses across global markets as the selloff in technology stocks intensified amid persistent concerns over heavy spending on artificial intelligence infrastructure. Sentiment was also dampened by reports that OpenAI may postpone its initial public offering until 2027. Meanwhile, oil prices continued to retreat to pre-war levels as progress in US-Iran peace efforts eased inflation concerns, though expectations that the US Federal Reserve will still raise interest rates later this year continued to weigh on equities. In Europe, investors will focus on Eurozone consumer inflation expectations, Italian business and consumer confidence, and French jobless claims data. No major corporate earnings are scheduled. In premarket trading, Euro Stoxx 50 and Stoxx 600 futures were down 0.8% and 0.7%, respectively.

European stocks closed higher on Thursday, gaining traction from a muted session yesterday amid fresh support from the tech sector. Euro STOXX 50 gained 0.8% to 6,263 and the STOXX Europe 600 rose 0.8% to a record high of 640. Chip stocks and companies with exposure to AI infrastructure surged following their pullback yesterday after the strong guidance by Micron in the US restored some confidence in the AI trade. ASML added 2.6% and Infineon gained 2.3%, while Siemens Energy jumped 2.5%. Meanwhile, banks also rebounded as energy prices retreated further and lowered sovereign yields in the Eurozone, supporting the outlook for credit activity. BNP Paribas and BBVA rose 1.5%. Lastly, Bayer surged close to 20%, its strongest session in 23 years after the US Supreme Court sided with the drugmaker on lawsuits concerning its Roundup weedkiller.