European stocks gave back their gains late on Tuesday, with the technology sector falling as markets once again grew worried about artificial intelligence-related trades.
The Stoxx Europe 600 Index closed down 0.1%, having risen as much as 0.7% during the session. The technology sub-index dropped 1.6%, with ASML and Infineon both declining more than 2%.
Chemical stocks were the best performers. Givaudan shares climbed 9.4% after the flavor and fragrance maker reported third-quarter like-for-like growth that significantly beat expectations.
British oil major BP saw its shares rise 3.7% after the company cut net debt by roughly $8 billion over the past three months, reaching its 2027 target ahead of schedule.
On the other hand, French luxury group LVMH edged lower after reporting third-quarter organic revenue that fell short of expectations.
Although European equities have lagged U.S. stocks this year, recent gains in regional markets have pushed valuations higher, with investors betting that strong corporate earnings growth will be enough to offset the impact of rising energy prices.
The market is now focused on the third-quarter earnings season for signs of whether companies can sustain strong profit growth, with results from semiconductor equipment makers such as ASML drawing particular attention.
"There are also growing doubts about the semiconductor trade due to intensifying competition from China. This puts greater pressure on this week's results from ASML and TSMC," said Wolf von Rotberg, equity strategist at Bank J Safra Sarasin.
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