European stock markets traded cautiously on Wednesday as investors balanced stronger-than-expected results from semiconductor equipment maker ASML (EU:ASML) against renewed weakness in global technology stocks following disappointing results from IBM (NYSE:IBM).
The pan-European STOXX 600 traded close to unchanged, reflecting uncertainty as investors weighed corporate earnings alongside expectations for interest rates and upcoming economic data.
Germany’s DAX fell almost 1 percent, France’s CAC 40 declined 0.4 percent and London’s FTSE 100 lost 0.6 percent.
ASML provides support for European technology shares
ASML, Europe’s largest listed technology company, rose 3.3 percent after reporting second-quarter revenue that comfortably exceeded market expectations.
The company attributed its strong performance to continued demand for artificial intelligence chip manufacturing equipment and raised its full-year guidance, reinforcing confidence that investment in AI infrastructure remains robust.
The upbeat results provided support for the semiconductor sector and helped limit broader market declines.
IBM results weigh on investor sentiment
Despite ASML’s strong performance, gains across European technology stocks were limited by the market reaction to IBM’s preliminary second-quarter results in the United States.
IBM missed revenue expectations, prompting a sharp sell-off in its shares and raising concerns that corporate spending is shifting away from traditional software and infrastructure towards artificial intelligence hardware.
The weaker sentiment affected several European technology companies, with SAP (TG:SAP) falling 2.1 percent and Capgemini (EU:CAP) declining 1.1 percent.
Markets remain focused on inflation and interest rates
Investors also continued to assess the implications of the latest United States inflation data.
Although headline inflation eased more quickly than economists had expected, underlying inflation remained persistent enough for financial markets to continue pricing in the possibility of another Federal Reserve interest rate increase before the end of the year.
Expectations that borrowing costs could remain elevated for longer continued to limit appetite for risk assets.
Attention later in the session was expected to turn to eurozone industrial production data, which investors will watch closely for further signs of the health of Europe’s manufacturing sector.
Other market movers
Among individual stocks, Seco (BIT:IOT) gained 6.6 percent after reporting higher first-half sales.
TomTom (EU:TOM2) fell 2.5 percent following the release of its latest quarterly results.
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