European shares edged lower on Thursday, pressured by weakness in technology stocks after quarterly results from U.S. tech giant Alphabet raised fresh concerns over artificial intelligence spending. Investors also monitored escalating tensions in the Middle East and awaited the European Central Bank's policy decision, Reuters reported.
The pan-European STOXX 600 index fell 0.5% to 643.47 points by 0705 GMT, with the technology sector emerging as the biggest drag on the benchmark.
French-Italian chipmaker STMicroelectronics tumbled 15% after forecasting third-quarter revenue with a midpoint slightly below market expectations. Dutch semiconductor equipment supplier BE Semiconductor Industries also declined 4.6% after releasing its second-quarter earnings.
Sentiment in the technology sector weakened after Alphabet increased its planned capital expenditure for 2026 by $15 billion, reigniting investor concerns over whether heavy investments in artificial intelligence will deliver adequate returns.
In contrast, energy stocks outperformed, with the STOXX 600 energy index gaining 0.6%. This move occurred as Brent crude futures climbed above $96 per barrel after the United States launched a fresh round of strikes on Iran, while Yemen's Houthi forces targeted oil tankers in the Red Sea. This broadened the regional conflict and raised concerns over energy supplies and the global interest-rate outlook.
Corporate earnings remained in focus across Europe, with investors assessing quarterly results from Nestlé and TotalEnergies for further clues on the health of the region's corporate sector.
Attention later in the day will also turn to the European Central Bank, which is widely expected to leave interest rates unchanged at its latest policy meeting, as markets look for guidance on the future path of monetary policy.
