European Markets Decline Amid Earnings Reports and Wall Street Selloff

LONDON — European markets experienced a downturn on Thursday, closing lower as investors reacted to a wave of corporate earnings reports and a significant selloff on Wall Street. The regional Stoxx 600 index fell by 0.72%, primarily driven by a 2.75% drop in technology stocks. Notably, consumer goods giant Unilever saw its shares rise by 6% despite missing sales growth forecasts, as the company raised its full-year margin guidance. Following a focus on European banks earlier in the week, investors turned their attention to earnings from major companies such as Nestlé, Renault, and Roche. Stellantis, the parent company of Jeep and Dodge, reported a staggering 48% decline in first-half net profit, citing reduced volumes and production gaps. Meanwhile, shares of French luxury brand Kering plummeted to a seven-year low due to a sharp revenue decline. In the U.S., stocks rebounded as investors sought to recover from a tech-driven selloff that marked the worst trading day for the Nasdaq Composite and S&P 500 since 2022. Analysts observed a market shift away from mega-cap stocks towards more cyclical sectors, exacerbated by disappointing earnings from tech giants like Alphabet and Tesla. Deutsche Bank strategists noted that the combination of weak earnings and poor economic data significantly impacted investor sentiment. In Asia-Pacific, stocks mirrored the global trend, with Japan's Nikkei 225 dropping 3%. The yen strengthened against the U.S. dollar amid reports that the Bank of Japan may consider a rate hike in its upcoming monetary policy meeting.