Key facts
- European shares declined Thursday, led by technology stocks.
- STMicroelectronics shares dropped 15% after forecasting lower-than-expected third-quarter revenue.
- Alphabet's increased capital spending plans for 2026 raised concerns about AI investment returns.
- US stocks opened lower on Thursday, with the Dow, S&P 500, and Nasdaq Composite declining.
- Oil prices jumped, with Brent crude futures rising above $96 per barrel due to Middle East conflict.
European shares edged lower on Thursday, with technology stocks leading the decline following quarterly results from U.S. tech giant Alphabet and a significant drop in chipmaker STMicroelectronics. The pan-European STOXX 600 index slipped 0.5% as tech stocks fell 2.7%. STMicroelectronics dropped 15% after forecasting third-quarter revenue below market expectations, while BE Semiconductor Industries lost 4.6% post-earnings.
Alphabet's decision to increase its 2026 capital spending plans by $15 billion added to investor concerns about the realization of returns from AI investments. Meanwhile, the energy sector saw gains, with Brent crude futures rising above $96 per barrel amid escalating Middle East conflict involving Iran and Yemen's Houthis targeting oil tankers.
Markets are also anticipating the European Central Bank's policy meeting, where rates are widely expected to remain unchanged. In the U.S., stocks closed lower on Wednesday, with the S&P 500 and Nasdaq Composite declining due to chip sector weakness and caution ahead of earnings from major tech companies like Alphabet and Tesla. Wall Street's main indexes opened lower on Thursday, with concerns over heavy AI spending resurfacing after the first batch of Big Tech earnings.