Key facts
- European shares were flat early Friday, on track for a weekly decline.
- Uncertainty over Middle East peace efforts persisted.
- Technology stocks led declines, pausing after a strong two-month rally.
- Broadcom's disappointing results weighed on global tech stocks.
- Euro zone inflation accelerated in May, prompting markets to price in a 25-basis-point interest rate hike by the European Central Bank next week.
- European chip stocks such as Infineon and Aixtron lost more than 5% each.
European shares were flat early on Friday and on track to end the week marginally lower as uncertainty prevailed over Middle East peace efforts, with technology stocks leading declines, pausing after a blistering two-month rally. The pan-European STOXX 600 index was down 0.3% for the week so far. Brent crude was hovering near $95 a barrel and looked set to end the week higher, as chances of a diplomatic resolution between the U.S. and Iran looked slim with both countries trading strikes earlier in the week. The Israel-Lebanon ceasefire also hangs in the balance as Hezbollah rejected the U.S.-brokered pact. The uncertainty has kept energy costs elevated, and the latest data showed that euro zone inflation accelerated in May, prompting markets to price in a 25-basis-point interest rate hike by the European Central Bank next week. Technology stocks were among the top sectoral decliners with a near 2% drop, easing after a strong rally that has helped the shares gain over 33% in the past two months. Global tech stocks also paused this week after disappointing results from U.S.-based Broadcom. European chip stocks such as Infineon and Aixtron lost more than 5% each, while AI equipment makers Legrand and Schneider Electric both slipped about 1% each. Earlier this week, the European Commission proposed laws to boost domestic cloud, AI and semiconductor industries and cut reliance on U.S. Big Tech, called the Cloud and AI Development Act.