Stock market dip on Wall Street due to tech sector downturn
Stock Market Report: European Stocks Rise for Third Consecutive Session
European stocks continued their upward trend for the third day in a row, with the Stoxx Europe 600 Index advancing 0.2%. However, the tech sector remained weak, with concerns over steep valuations and a general mood of risk aversion leading to declines.
The Euronext Dublin closed 1.6% lower, reflecting the tech sector's struggles. Intel, a significant player in the tech industry, is currently trading around $24.85 on the Nasdaq. Despite recent slight gains, the company reported significant net losses and high earnings uncertainty for 2025. There are concerns about US government involvement, as Intel announced a US grant, but the government has stated it is still negotiating the deal. Such involvement raises market and regulatory uncertainties regarding the extent and impact of this government stake or support in Intel's equity.
Across the Atlantic, Wall Street experienced a second consecutive day of declines. The S&P 500 fell 0.8%, the Nasdaq Composite dropped nearly 1.5%, and the Dow Jones Industrial Average decreased 0.2%. Weakness in the tech sector persisted as a key factor in these declines.
In London, the FTSE 100 hit a new all-time high, climbing 1.1%. Defensive stocks, such as those in the food and beverage and personal care sectors, outperformed. Alcon, a medical device manufacturer, slumped 9.4% after cutting its net sales forecast. However, Ithaca Energy jumped 10.4% after lifting its 2025 production forecast.
Elsewhere in Europe, the Cac 40 in Paris ended slightly lower, while the Dax 40 in Frankfurt closed down 0.6%. Ryanair and AIB also dipped 2.4% each. The FTSE 250 ended up 0.2%, but the AIM All-Share finished 0.5% lower.
Kingspan finished 4.4% lower due to a profit warning from Danish peer Rockwool. United Utilities Group rose 3.5% after being upgraded to overweight by Barclays analysts. Kerry Group was the standout performer, rising 1.7%.
In the United States, US Commerce Secretary Howard Lutnick is looking into the possibility of the government taking equity stakes in Intel and other chip companies. This development, along with growing concerns over President Donald Trump's influence over the sector, has been a focus for investors.
Construction, travel and leisure stocks were the biggest laggards. Rate sensitive housebuilders on the FTSE 100 showed a negative trend, with Persimmon falling 0.3%. United Utilities firmed 3.5% due to a Barclays upgrade and a 1,535 pence share price target.
ConvaTec gained 5.6% due to a share buyback worth up to $300 million. Kenmare Resources finished down 2.7% after reporting an $88.6 million loss before tax.
Overall, the European market showed resilience, with the tech sector being the main area of concern. The US market, on the other hand, continued to experience declines, with worries about government intervention and President Trump's influence taking centre stage.
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