Negative opening for European equity markets, with broad-based selling across the major indices after a week dominated by stronger-than-expected U.S. macroeconomic data. Renewed inflationary pressures are fueling concerns that the Federal Reserve may adopt a more cautious stance on rate cuts, pushing investors toward a risk-off approach.
The STOXX 600 fell 0.95% to 610 points, while the DAX lost more than 1.3%, weighed down by industrial and export-oriented stocks that are particularly sensitive to rising bond yields. The CAC 40 (-1.0%) and the FTSE 100 (-0.9%) also traded lower, with London additionally pressured by political uncertainty linked to growing tensions within Prime Minister Keir Starmer’s government.
Among the worst performers was the FTSE MIB, down 1.38% below 49,400 points, hit by profit-taking in the banking and industrial sectors following the strong rally seen in recent weeks. The Italian market remains particularly exposed to rising risk aversion and the widening of European bond spreads.
Investors remain focused on the trajectory of U.S. inflation. Recent data coming in above expectations reinforce the “higher for longer” scenario, with government bond yields moving higher and equity valuations coming under pressure. In this environment, capital flows are shifting toward more defensive assets, while cyclical and financial sectors are leading the sell-off.
In the short term, market sentiment is expected to remain fragile. Without clear signs of easing inflationary pressures or more accommodative signals from central banks, European equities could extend the corrective phase that began earlier this week.