Europe’s STOXX 600 hits record high on AI-fueled tech rally

The pan-European STOXX 600 surged to a record high on Friday, rising 0.9% to 655.2 in morning trading, as a global rebound in technology shares and robust corporate earnings positioned European benchmarks for a fourth consecutive month of gains.wsau

The rally followed blowout quarterly results from Microsoft ↗ 0.52% and Amazon Amazon.com, Inc. ↘ 2.24% on Wall Street, which reignited conviction in artificial intelligence spending and helped the S&P 500 gain 1.66% and the Nasdaq Composite surge 2.78% on Thursday.dmarketforces

Tech Stocks Lead the Charge

European technology shares jumped 2.2%, tracking Asian peers as demand for AI-linked stocks improved. Soitec added 7.2%, Infineon Technologies rose 7%, and ASML ↘ 0.19% gained 3.5%. In Asia, Japan's Nikkei 225 surged 3.46%, led by chip and AI-linked shares, while the Bank of Japan held its policy rate steady at 1%.dmarketforces+1

Germany's DAX rose 0.8%, France's CAC 40 gained 0.5%, and London's FTSE 100 added 0.4%. A more than 1% dip in oil prices also helped sentiment, with Brent crude contained below $90 a barrel as more supplies flowed through a crucial chokepoint despite a lack of major breakthroughs in the U.S.-Iran conflict.wsau+1

Earnings Season Boosts Sentiment

Corporate results added further fuel. Credit Agricole Crédit Agricole S.A. gained after posting better-than-expected second-quarter earnings, while Schneider Electric surged 11% on Thursday after raising guidance.wsau+1

France's Engie ↘ 1.43% reported a 3.3% rise in first-half earnings before interest and taxes, excluding nuclear, to €5.3 billion, beating analyst expectations of €5.1 billion, according to Reuters. Strong natural gas trading and higher electricity transmission tariffs offset lower gas deliveries due to warmer-than-average weather. Europe's largest gas network operator raised its annual EBIT guidance to between €9.2 billion and €10.2 billion, up from a previous range of €8.7 billion to €9.7 billion.reuters

Risks Remain on the Horizon

Not all news was positive. Melrose Industries dropped 9.3% to the bottom of the STOXX 600 after warning of additional costs following an incident at its California facility. Siemens Healthineers fell 3.3% after cutting its full-year revenue forecast.investing+1

Investors now await flash Eurozone consumer price data for July, with economists expecting headline inflation to tick higher following signals of persistent price pressures in Germany — a development that could complicate future rate-cut discussions for the European Central Bank.investing