European equities climbed to a two-week peak on Thursday, propelled by strong corporate results and a healthcare sector rally that has become investors’ preferred shelter as the AI boom loses momentum.
The benchmark Stoxx 600 advanced 0.4 percent to 640.16 points, touching its highest level since September 30 during intraday trading. Investors anticipate that a strong earnings season will finally break the index out of the tight trading band that has trapped it for the past month.
Ericsson led the charge, with shares jumping 6.8 percent after the Swedish telecom equipment maker beat third-quarter profit expectations. Healthcare stocks surged 2.4 percent, cementing their status as the market’s top defensive play when enthusiasm for artificial intelligence wanes.
Technology shares, meanwhile, tumbled 1.5 percent. German chip systems manufacturer Aixtron plunged 13 percent, while Infineon and Soitec fell 5.2 percent and 7.7 percent respectively. ASML, the Dutch chip equipment giant, shed 4.2 percent.
The tech rout followed Wednesday’s hotter-than-expected US inflation data, which renewed anxiety about potential Federal Reserve rate hikes. Companies funding expensive AI infrastructure with borrowed money face particular pressure under those conditions.
“The CPI pressure is still with us and that is triggering some more fear on long-duration stocks, for techs, and also on their financing,” noted Michele Morganti, senior equity strategist at Generali Investments.
Elsewhere, Mondi dropped 7.9 percent after the packaging firm announced price increases across several paper grades to offset rising energy and raw material costs. Antofagasta slid 4.1 percent as the miner reported copper production of 436,900 tons year to date, down 8.3 percent from 2025. That decline, combined with softer copper prices, dragged the mining sector down 0.8 percent.
French consumer prices rose 3.4 percent year-on-year in September on an EU-harmonised basis, matching the preliminary estimate from late September. Traders currently price an 87 percent probability that the European Central Bank delivers a quarter-point rate hike in December, according to LSEG data.
“The inflation rates in Europe are reflective of energy problems and industrial bottlenecks. When you have these kinds of problems, you actually required more capital in the system to test to address some of them,” said James Rasteh, co-founder and chief investment officer at Coast Capital Management.
In a potentially seismic leadership shift, the World Economic Forum could name Christine Lagarde as its next chair within weeks, according to four people familiar with the matter. Such a move would force Lagarde to resign early from her ECB presidency and set off a broader reshuffle at the central bank’s helm.
