European share markets traded cautiously on Wednesday as strength in technology stocks sparked by ASML's upgraded outlook for 2026 was largely offset by growing concern over heightened tensions between Iran and the United States. By 0709 GMT the pan-European STOXX 600 index had edged down 0.1% to 641.07 points, with the majority of sectors finishing in the red.
Technology was the day's notable outperformer, rising 1.4% as investors reacted to ASML's stronger guidance. ASML climbed about 6% after management raised its financial forecasts for 2026, a move the market read as confirmation of continued AI-driven demand. Chip-related names ASM and Soitec also benefited, each adding more than 2%.
That buying followed a period of market nervousness about whether very high expectations for an AI-led surge can be maintained after a steep rally in the second quarter. The cautious repositioning by some investors this year has included trimming exposure to sectors they view as potential losers from the AI surge, with software companies cited among those at risk.
Germany's benchmark underperformed regional peers, falling nearly 1%, pressured in part by a 2% decline at software group SAP. Other software sector names, including Dassault Systèmes and Capgemini, each gave up more than 1%.
On the corporate results front, Richemont, owner of the Cartier brand, registered a notable gain of 5.3% after delivering first-quarter results that beat expectations. The luxury goods group said its jewellery lines saw particularly strong demand across Asia and the Americas, which helped lift its shares.
Investors are parsing quarterly earnings and forward guidance against a backdrop of rising oil prices and geopolitical strain. Oil climbed to roughly $85 a barrel as tensions between Iran and the United States intensified and Tehran shut the crucial Strait of Hormuz, a development that has sharpened market caution and capped broader equity gains.
Overall, the session illustrated a bifurcated market dynamic: targeted strength in technology and select consumer luxury names counterbalanced by broader sector weakness and risk-sensitive selling tied to geopolitical and commodity moves.
Key points
- STOXX 600 slipped 0.1% to 641.07 by 0709 GMT, with most sectors in the red.
- Technology gained 1.4% led by ASML, which rose about 6% after lifting its 2026 forecasts; ASM and Soitec advanced over 2% each.
- Richemont rose 5.3% after better-than-expected first-quarter results driven by jewellery demand in Asia and the Americas; software names such as SAP, Dassault Systèmes and Capgemini fell.
Risks and uncertainties
- Escalating Iran-U.S. tensions - heightened geopolitical risk has pushed oil to around $85 a barrel and restrained equity market gains, affecting energy-sensitive and broad market sentiment.
- Persistence of AI-driven expectations - recent market jitters raise uncertainty over whether the strong second-quarter rally and lofty AI-related expectations can be sustained, creating downside risk for sectors seen as vulnerable to AI disruption, notably some software companies.