European Stocks Fall as Rheinmetall Slashes 2026 Guidance; Shell and Volvo Also Weigh on Market
European stocks opened lower on Thursday as investors digested a fresh wave of corporate earnings and macroeconomic updates. The pan-European Stoxx 600 hovered just below the flatline, while the UK’s FTSE 100 fell 0.4%. Meanwhile, France’s CAC 40 rose 0.6%, Germany’s DAX remained nearly flat, and Italy’s FTSE MIB inched up 0.2%, highlighting mixed market sentiment across the region.
Rheinmetall led the declines, shedding 5.6% after cutting its preliminary 2026 forecasts. The German defense and automotive supplier now expects annual revenues of around €13.6 billion, citing weaker-than-anticipated growth across all divisions. Investors reacted cautiously, weighing the implications for the broader defense sector and European industrial stocks.
Other major European companies also reported earnings on Thursday. Volvo Cars revealed a 68% drop in fourth-quarter operating income to 1.8 billion Swedish krona ($200 million), sending its shares down 16.5% after a partial recovery from early losses. British oil giant Shell posted weaker-than-expected fourth-quarter profits, with adjusted earnings of $3.26 billion, falling short of the $3.53 billion analysts anticipated amid lower crude prices.
Traders are also focused on upcoming central bank announcements. The European Central Bank and Bank of England are set to release their latest monetary policy decisions, with no interest rate changes expected. Meanwhile, key European economic data, including German factory orders, French industrial production, and EU retail sales, will further influence market movements.
Global markets have been volatile this week, following a tech-driven sell-off on Wall Street that dragged U.S. stocks lower for a second day. S&P 500 futures showed a modest rebound overnight, supported by corporate earnings from Alphabet, while Amazon’s quarterly results are set to be released later in the day. Asian markets also reflected Wall Street’s turbulence, with South Korean stocks leading declines amid ongoing tech stock pressure.
source: cnbc