European Stocks Set for Muted Open

European stocks traded cautiously on Thursday, with both the STOXX 50 and the STOXX 600 edging up 0.1% only, amid renewed concerns over elevated AI-related valuations. European equities, however, outperformed their Asian and US counterparts, supported by the region's relatively limited exposure to the technology sector. Technology stocks nevertheless came under pressure, with ASML Holding falling 2.3%, Infineon Technologies losing 2%, and STMicroelectronics declining 1%. Other notable decliners included HSBC (-1%), Schneider Electric (-1.3%), and Siemens Energy (-2.8%). In contrast, healthcare stocks advanced, with AstraZeneca (+1.6%) and Sanofi (+1.8%) gaining, while Bayer surged more than 4% after announcing it would consolidate its US Roundup business into a new standalone unit called Ruveon. Elsewhere, LVMH gained 1.6%, UniCredit added 1%, and Sodexo jumped 7% to top the STOXX 600 after raising its full-year organic revenue growth forecast.

European equity markets were set for a subdued open on Thursday as global risk sentiment weakened amid a technology-led selloff, fueled by concerns over the sustainability of the AI-driven rally. Investors also awaited a key US jobs report for fresh clues on the Federal Reserve’s policy outlook after Chair Kevin Warsh said inflation expectations had eased over the past month. Meanwhile, rising oil flows through the Strait of Hormuz and signs of progress in indirect US-Iran talks eased pressure on oil-importing economies worldwide. In Europe, investors will monitor employment data from Spain and Italy, along with France’s budget balance figures, while no major corporate earnings releases are scheduled. In premarket trading, Euro Stoxx 50 and Stoxx 600 futures were flat to slightly lower.

European stocks eased from records on Wednesday as a fresh pullback for chip producers offset support from an improving macroeconomic backdrop. The Euro STOXX 50 dropped 0.6% to 5, and the STOXX Europe 600 fell 0.4% to 640. ASML and Infineon fell 4.6% each, tracking the AI infrastructure sector globally amid fresh uncertainty on whether the historical rally for chip producers has been overdone. Other companies with exposure to data centers and their power declined, with Siemens, Schneider, and Siemens Energy dropping between 3.1% and 1.5%. In turn, the software side rallied on respite from US hyperscaler giants. Also, banks were mostly higher as softer-than-expected inflation in the Eurozone limited expectations of another rate hike by the ECB this year. UniCredit added 0.6% and Deutsche Bank jumped 0.4%. The bloc's inflation rate fell to 2.8%, below expectations of 3%, and the core gauged fell to 2.4%.