European shares retreat from record as global tech selloff deepens

European shares fell on Friday as technology stocks tracked a broader global selloff in the sector, pulling the pan-European Stoxx 600 back from a record-high close reached in the previous session.

Tech Weakness Drags Markets Lower

The Stoxx 600 dropped around 0.6% in morning trading, weighed down by a 1.5% decline in the European technology sector. Chipmakers Infineon and STMicroelectronics ↗ 2.66% slipped roughly 3% each, while semiconductor equipment makers ASML ↗ 1.22% and BE Semiconductor also fell.kfgo+1

The selling followed a volatile week for chip stocks globally. Asian equities dropped sharply overnight, and Nasdaq futures fell about 1% ahead of the U.S. open. The retreat came as investors reassessed valuations across AI-linked names that have surged over the past year. According to Axios, chip stocks in particular are "slumping from their record highs" as the market enters what it described as "a reality-check moment in the AI buildout".axios+1

Earlier in the week, a sharp selloff on Tuesday saw the Stoxx 600 Technology index drop 3% and South Korea's Kospi plunge 10%, driven by heavy losses in Samsung and SK Hynix. Though markets partially recovered on Thursday after Micron Technology ↗ 2.98% reported blowout earnings — with revenue of $41.46 billion more than quadrupling year-over-year — the rebound proved short-lived.cnbc+1

Zalando Falls on BaFin Probe

Separately, shares in Zalando fell 4.4% after Germany's financial regulator BaFin announced an investigation into the online fashion retailer's 2025 financial statements. BaFin said it had evidence that Zalando may have breached accounting rules by omitting details of a related-party transaction connected to its acquisition of About You from the notes to its consolidated accounts.rte+3

Zalando described the matter as "a purely formal and materially insignificant aspect of the notes to the financial statements," adding that all relevant information had already been publicly accessible as part of the About You tender offer process.investing+1

Broader Context

Despite Friday's decline, the Stoxx 600 remained on track for a weekly gain and has risen more than 7% this year. The index hit a record closing high on Thursday before the pullback. The week's turbulence underscored the market's unease with stretched valuations in AI-related stocks, even as underlying demand for chips remains strong. Barron's noted this month that while sales and profit estimates for chip companies have moved higher, "volatility is picking up".reuters+2