European stocks rebound, earnings in focus

The STOXX 50 rose 0.9% and the broader STOXX 600 gained 0.6% on Thursday, snapping their longest losing streaks in weeks—six and five consecutive sessions, respectively—as investor sentiment shifted away from macroeconomic concerns and toward corporate earnings.

The rally was driven in part by a rebound in chip stocks, which had suffered sharp losses in the previous session. Positive earnings from Taiwan Semiconductor Manufacturing Company (TSMC) provided a much-needed boost to the sector, lifting sentiment globally.

Semiconductor leaders posted notable gains: ASML Holding surged 2.7%, Infineon Technologies advanced 2%, and STMicroelectronics climbed 3.7%. The upbeat momentum extended to the industrial sector, with ABB jumping more than 7% after the company reported record order intake, underscoring resilient demand in automation and electrification.

Volvo also contributed to the gains, rising 0.7% after delivering better-than-expected quarterly earnings. The Swedish truckmaker noted signs of recovery in European markets, which helped offset soft demand in North America.

In the banking sector, Swedbank gained 1.6% on the back of strong quarterly results, reflecting improved net interest income and a stable credit environment. However, the day was not without setbacks. Shares of easyJet plunged over 6% after the airline warned that worsening air traffic control delays and surging fuel prices would likely weigh on full-year profits.

Pharmaceutical heavyweight Novartis also bucked the positive trend, falling nearly 2% despite beating profit expectations and announcing a $10 billion share buyback program. Analysts attributed the decline to concerns about the company’s growth outlook and valuation following its recent outperformance.

Overall, the day’s gains reflected a cautious return to risk appetite, as investors assessed a mixed but generally encouraging start to the earnings season across sectors.