European markets finished sharply lower Friday, with the region’s tech sector plunging 2.8% in its worst session since early July. The rout wiped billions from semiconductor valuations and soured an otherwise banner month for equities.
The continent-wide Stoxx 600 slipped 0.4% to settle at 646.75, capping a month that still delivered the benchmark’s strongest performance since June. Yet the closing session told a different story after U.S. earnings from Amazon and Intel reignited fears about runaway artificial intelligence spending.
Investors worldwide fled technology shares after those reports highlighted the enormous capital required to build AI infrastructure without a clear timeline for returns. “Strong AI demand is no longer enough on its own,” said Daniela Hathorn, senior market analyst at Capital.com.
The sell-off hit European chip suppliers hardest. AT&S, Soitec, and Technoprobe each lost between 9% and 13%, ranking as the Stoxx 600’s biggest decliners. Meanwhile, Michael Hewson, chief analyst at MCH Market Insights, noted that markets cannot yet solve the equation of massive capital expenditure versus delayed investment payback.
The technology rout overshadowed healthy earnings elsewhere on the continent. Universal Music Group surged 7.9% for the index’s top gain after streaming subscription revenue accelerated in the third quarter. That lifted the broader media sector 1.6%.
Sanofi climbed 4.7% following results that beat analyst forecasts and prompted the French drugmaker to raise its outlook. Puma advanced 5.6% on stronger-than-expected quarterly sales, while BP posted a modest gain after net income surpassed projections.
Beyond equities, fresh economic data underscored the region’s mixed picture. Eurozone growth exceeded predictions last quarter, showcasing resilience against elevated energy prices. However, French consumer prices jumped more than anticipated in October, hitting their highest inflation rate since December 2023.
Political pressures compounded the uncertainty. France’s second-largest eurozone economy now faces investor anxiety over mounting government debt, pushing bond yields to multi-year highs. Bayer also rose 5.5% after prevailing in court Thursday over claims linking its Roundup weedkiller to cancer.
Friday’s pullback demonstrates how swiftly market optimism can reverse when global sentiment shifts, even amid a quarter of solid European corporate earnings.
