European stocks fall as global chip selloff deepens

European equities opened lower on Friday as a global semiconductor selloff that began on Wall Street spread across the continent, compounded by persistent geopolitical unease over the U.S.-Iran conflict.

Chip Stocks Lead Decline

The pan-European STOXX 600 was down 0.6% at 639.94 points in early trading, with investors rotating out of semiconductor shares after the Philadelphia SE Semiconductor Index dropped 3.5% on Thursday in New York. The selloff continued despite strong earnings from TSMC Taiwan Semiconductor Manufacturing Company Limited ↗ 2.96%, whose bullish outlook failed to lift sentiment.youtube+2

The STOXX Europe 600 Technology index shed over 2% at the open, with chipmakers ASML ↗ 3.25%, Infineon, and STMicroelectronics ↗ 7.03% among the heaviest decliners. The weakness came just days after ASML had raised its full-year sales forecast for the second time in 2026, projecting annual revenue of €43 billion to €45 billion.investing

Broader risk aversion was fueled by the ongoing U.S.-Iran conflict, which has rattled markets intermittently since hostilities escalated in late February. Oil prices remained elevated following repeated exchanges of fire between U.S. and Iranian forces throughout July, keeping energy costs high and inflation concerns alive.apnews+2

Saab Bucks the Trend

Swedish defense group Saab stood out as a rare gainer after reporting its second-quarter results early Friday. The company posted operating profit of SEK 2.79 billion, beating the SEK 2.48 billion analyst consensus. Order bookings surged to SEK 68.4 billion, more than doubling from SEK 28.4 billion a year earlier, boosted by a SEK 47 billion submarine order from Poland.barchart+2

Sales rose to SEK 25.5 billion, reflecting organic growth of nearly 30%, as Europe's rearmament drive continued to fill the company's order book.finance.yahoo

Broader Context

The session extended a difficult stretch for European markets. Stocks had already closed lower on Thursday amid geopolitical concerns and weakness in the technology sector. The Euro Stoxx 50 fell 0.85% on the day, while Asian markets also posted steep losses, with Japan's Nikkei 225 tumbling over 4.5%. U.S. futures pointed to further declines at the open, with Nasdaq 100 futures down more than 1.6%.hl+2