European equities showed divergent trends on Wednesday as ASML's disappointing outlook weighed on markets, while investors monitored trade negotiations and corporate earnings.
At 08:36 GMT, the pan-European STOXX 600 dipped 0.2% to 544.14 points. Germany's DAX edged up 0.1%, Spain's IBEX climbed 0.7%, and Britain's FTSE 100 rose 0.2%, while France's CAC 40 remained flat.
ASML shares plunged 7.7%, heading for their sharpest single-day drop in nearly nine months. The world's largest semiconductor equipment manufacturer warned it might miss 2026 growth targets despite beating second-quarter order expectations. This announcement pressured the technology sector, which slid 1.3%, dragging down chipmakers BE Semiconductor (down 2.8%) and ASMI (down 3.8%).
Recent earnings forecasts indicate deteriorating corporate health in Europe, compounded by uncertainty from former U.S. President Donald Trump's tariff declarations. "Europe appears most vulnerable this earnings season," noted Antti Tuhvonen, multi-asset strategist at UBS Global Wealth Management, citing tariff uncertainties, weak business confidence, and margin pressures from inventory buildup.
Stateside, focus shifted to upcoming producer price data after Tuesday's consumer inflation figures revealed tariffs' inflationary impact. On trade developments, Trump announced 19% tariffs on Indonesian goods under revised agreements while detailing planned pharmaceutical levies.
Investors await clarity on U.S.-EU trade talks as the European Union prepared retaliatory measures should negotiations fail. Auto stocks tumbled 1.3%, led by Renault's 15.9% collapse to an over one-year low. The French automaker slashed its annual operating margin forecast and appointed CFO Duncan Minto as interim CEO. Stellantis dropped 3.3% after terminating its hydrogen fuel cell technology initiative and canceling planned hydrogen vehicle launches this year.
Contrasting the declines, asset manager Partners Group surged 5.3% following better-than-expected half-year assets under management figures and reaffirmed full-year guidance.
Economic data revealed U.K. inflation unexpectedly accelerated to 3.6% year-on-year in June - the highest reading in over a year - exceeding May's 3.4% rate.
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