STOXX Europe 600 index extends drop to 0.3, session low

STOXX Europe 600 index extends drop to 0.3, session low

STOXX Europe 600 Index Extends Drop to 0.3, Session Low

The pan-European STOXX 600 index (.STOXX) fell to a session low, declining 0.3% to 630 points, as global risk-off sentiment and trade uncertainties weighed on investor confidence. The index, which had reached record highs in the previous session, extended its decline amid renewed concerns over U.S. tariff policies and the potential impact of artificial intelligence (AI) on corporate demand.

Trade tensions escalated after the European Union paused ratification of its trade deal with the U.S., citing Washington's reintroduction of tariffs under new economic emergency measures. This followed the U.S. Supreme Court's invalidation of country-specific tariffs, which had initially prompted last year's agreement. Automakers were among the hardest hit, with BMW, Mercedes-Benz, and Volkswagen dropping between 1.5% and 3%, as the sector faced renewed exposure to transatlantic trade friction.

Meanwhile, AI-related concerns pressured technology and software stocks. SAP and Adyen fell 3.4% and 5.4%, respectively, as investors worried that advancing automation tools could reduce demand for corporate software and payment services. The selloff reflected broader market jitters over AI's disruptive potential, despite some companies, like Enel, posting gains. Enel surged 6.8% after announcing a €1 billion share buyback and outlining a new investment plan.

Corporate earnings added to the mixed outlook. Edenred, a French provider of vouchers and benefit cards, slid 8.5% after forecasting slower profit growth in 2026. Conversely, Swiss plumbing materials firm Geberit rose 2.2% following an upward revision to its full-year sales guidance.

Investors remain cautious ahead of key economic data, including Eurozone consumer confidence figures and Italian business sentiment readings, which could provide further clarity on regional economic momentum. The U.S. 10-year Treasury yield edged higher to 4.05%, while German and U.K. bond yields also rose slightly, reflecting heightened sensitivity to interest rate expectations.

The STOXX 600's decline marks a pullback after four consecutive months of gains, with markets now pricing in persistent risks from trade policy shifts, AI disruption, and an uncertain Fed rate-cut trajectory amid the U.S. government shutdown.