European Stocks Extend Downturn
European stocks extended early losses to close firmly lower on Thursday, pressured by projections of higher rates by the Federal Reserve and a deterioration in geopolitical conflict in the Middle East.
The STOXX 50 dropped 1.3% to 5,200 and the STOXX 600 fell a softer 0.8% to 536. Israel and Iran continued to exchange missile strikes while the US maintained its hawkish rhetoric against Iran, stoking concerns that it may get involved and escalate conflict into major economies. In the meantime, the Federal Reserve held its rates unchanged but FOMC members reduced the magnitude of rate cuts for upcoming years, suggesting that policymakers see tariffs and higher fiscal deficits as inflationary.
Losses were broad based on the corporate front as all sectors closed lower. Adyen sank 3.5% so lead the laggards in tech for a second session, and all banks in the STOXX 50 fell more than 1.5%. Meanwhile, LVMH lost 2.5% on lingering pessimism over its outlook and broker downgrades.
Source: Trading Economics
