European Stocks Under Pressure, AI Stocks a Weigh
European stock markets closed sharply lower on Friday (July 17th), following pressure in global equity markets. Investors began reducing exposure to artificial intelligence (AI)-based stocks, while geopolitical tensions also weighed on market sentiment.
The Euro STOXX 50 Index fell 1.1% to 6,229, while the STOXX Europe 600 fell 0.4% to 641. This decline reflected growing investor caution regarding technology stock valuations and the prospects for AI infrastructure spending.
AI-related stocks weakened across various global markets. Concerns arose as major AI developers, or hyperscalers, were expected to slow infrastructure spending after a period of rapid expansion.
Sentiment was further depressed after Chinese company Moonshot released a robust LLM model. This sparked concerns that Western technology dominance could come under greater pressure from Chinese competition.
In the European technology sector, ASML fell 3.9%, while Siemens fell 2.3%. Pressure is also evident in the banking sector as rising natural gas prices increase inflation risks and impact the credit outlook.
As a result, European stock markets could remain under pressure if the rotation out of AI stocks continues and the risk of energy inflation increases. Investors will likely be more selective in choosing technology stocks, banking stocks, and issuers sensitive to energy costs.
Source: Newsmaker.id
