European Stocks Recover as EURUSD Drops Below 1.15

The Stoxx 600 index closed down 0.3% after trading near a three-month low. EURUSD fell to 1.153, marking a second consecutive session of weakness. German 10-year Bund yields rose by 4 basis points to 3.57%. Brent crude futures remained above $107 per barrel. These factors combined to pressure equity valuations across the continent.

The DAX index ended the day 0.2% lower. It had previously dropped more than 1% to its lowest level since July 24. Bank stocks contributed significantly to the index decline. The ZEW Economic Sentiment Index fell to -34.7 points, missing market expectations of 40.0. This data point highlights deteriorating business confidence in Germany.

Inflation Data Accelerates Across Europe

Inflation rates rose in several major economies during August. France saw year-on-year inflation accelerate to 2.4%. Poland reported a rise to 3.4%, while Spain recorded 4.3%. Slovakia was the exception, with annual inflation easing to 3.1%. These figures suggest persistent price pressures in the region. Central banks face a challenging environment for monetary policy decisions.

Tech Sector Faces AI Risk Fears

Technology stocks led the declines in the German market. Infineon Technologies shares dropped nearly 9% following warnings about AI-driven cyberattacks. Siemens Energy fell 7.3%, and Hochtief lost more than 7%. These moves reflect heightened caution regarding artificial intelligence development. Investors are reassessing the risks associated with rapid technological advancement.

Defensive and industrial names showed resilience against the broader sell-off. Rheinmetall gained 2%, while ASML rose 1.5%. Schneider Electric added 1.3% to its value. SAP shares climbed 3.2%, bucking the trend in the tech sector. This selectivity indicates that capital is rotating toward specific sectors. Market participants are differentiating between growth opportunities and risk exposures.

Global Markets Reflect Broader Tension

Wall Street futures traded lower ahead of the US market open. Bitcoin fell 2% to trade below $77,000. Gold pulled back by approximately 0.5%. Cocoa prices dropped more than 3% in commodity trading. US 10-year Treasury yields increased by 8 basis points to 5.04%. The data from GN auto markets/indices: market indices confirms a tense global risk environment.