European technology stocks received a significant boost as STMicroelectronics, a leading chipmaker, raised its revenue targets for its data center business. This move, driven by the increasing demand from the AI sector, saw the company’s shares climb 7.9% to €63.9, marking their highest point since September 2000. The pan-European STOXX 600 index also rose by 0.9%, with technology stocks leading the gains at 2.6%.
AI Demand Driving Growth
The AI boom has created a strong demand for semiconductors, which are becoming central to the global economy’s infrastructure, according to John Plassard, head of investment strategy at Cité Gestion. Other AI-related companies, such as Infineon and Schneider Electric, also saw their stocks rise by 5.1% and 2%, respectively.
Investors are also closely monitoring a euro zone consumer inflation report expected to show a 3.2% rise in consumer prices for May. This data will provide insights into how the ongoing Middle East conflict is impacting the euro zone economy. The European Central Bank is anticipated to raise interest rates by 25 basis points in its upcoming meeting.
Global Economic Factors
In addition to the tech sector’s performance, global economic factors are influencing market sentiment. A partial ceasefire between Hezbollah and Israel has helped ease risk concerns, while crude oil prices have decreased by over 1% following U.S. President Donald Trump’s comments on ongoing talks with Iran. Despite this, energy prices remain high at $93 a barrel.
Elsewhere, Prosus shares surged by 10% after EU regulators extended the deadline for the Dutch tech investor to reduce its stake in Delivery Hero. However, not all companies fared well; Abivax’s shares fell 32% due to disappointing trial results for its inflammatory bowel drug, and British American Tobacco saw a 3.6% decline after reporting weaknesses in its tobacco product volumes.
In trade news, a European Parliament committee voted to remove EU import duties on several U.S. goods, aligning with a trade agreement made with the United States last year.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
