European Stocks Slip as Tech Selloff and Inflation Concerns Pressure Markets
European share markets fell on Wednesday, weighed down by a global technology selloff and renewed worries over inflation. The pan-European STOXX 600 index dropped 0.26%, while Germany’s DAX slid 0.7%. In London, the FTSE 100 eased 0.11% after fresh data revealed UK inflation surged to its highest level in 18 months in July, intensifying concerns over the Bank of England’s next policy move.
The decline in European equities tracked similar losses across Asia, where tech-heavy markets in Taiwan and South Korea suffered the steepest falls. MSCI’s broad Asia-Pacific index outside Japan slipped 0.74%, underscoring the global pressure on technology stocks. Analysts attributed the downturn to risk-off sentiment ahead of U.S. Federal Reserve Chair Jerome Powell’s remarks at the upcoming Jackson Hole symposium, where investors hope to gain clarity on the central bank’s interest rate strategy.
Adding to the uncertainty, U.S. policymakers are weighing deeper intervention in the technology sector. Reports revealed that the Commerce Department is exploring equity stakes in semiconductor companies, including Intel, in exchange for CHIPS Act grants. The government has also struck deals with firms like Nvidia, securing revenue shares from chip sales to China. Market watchers warned these moves signal a shift toward greater state involvement in the private sector, heightening investor caution.
Meanwhile, oil markets steadied as investors monitored developments in peace talks over Russia’s war in Ukraine. Brent crude rose 0.8% to $66.32 per barrel, while U.S. crude gained 0.72% to $62.80. Although discussions between U.S. President Donald Trump, Ukrainian President Volodymyr Zelenskiy, and European leaders offered little breakthrough, Washington signaled willingness to provide limited security guarantees and potential air support, while ruling out deploying ground troops.
Currency markets also reflected caution ahead of Jackson Hole. The dollar firmed modestly, pushing the euro down to $1.1639, while sterling held steady after UK inflation data. The New Zealand dollar slumped more than 1% after the Reserve Bank cut rates and hinted at further easing to offset slowing growth. With traders nearly fully pricing in a U.S. rate cut next month, Powell’s speech on Friday is expected to be the week’s pivotal market event.
Source: Reuters