European markets showed little net movement on Tuesday as investors balanced concerns over rich valuations in AI-sensitive technology stocks against potential upside for defence contractors tied to an unfolding NATO summit in Turkey.
By 0713 GMT the pan-European STOXX 600 was essentially unchanged at 650.84 points, following a close below record highs in the prior session. Technology was the weakest sector, falling about 1.6% as equipment and chipmakers felt the brunt of the selling. ASML and Infineon each lost roughly 4% on the day.
Siemens Energy registered a more pronounced decline, sliding 5.5% after Barclays lowered its rating on the company from "equal-weight" to "underweight." The move added to the broader technology-led softness, which traders attributed to worries that a multi-week rally in chip stocks has pushed valuations too high.
Global sentiment around tech names also showed signs of strain outside Europe. South Korea's Samsung Electronics shares moved lower despite the company issuing robust forecasts, while Nasdaq futures dipped nearly 1%, reflecting a more cautious tone on Wall Street.
Counterbalancing some of the tech weakness, the defence sector in Europe edged higher as attention centered on the NATO summit. Market participants expected announcements of fresh government defence deals, driven in part by U.S. pressure for higher European defence spending. The defence bucket has been the best-performing sector on the STOXX index so far this month.
Among individual movers, Sweden's Saab jumped 5.3% after Morgan Stanley upgraded the stock from "underweight" to "overweight." Energy heavyweight Shell also gained, rising about 2.2% after marginally lifting its second-quarter integrated gas outlook.
Overall, the market displayed a bifurcated tone: persistent wariness around richly valued AI and semiconductor-related names, and selective investor interest in defence and energy companies that could benefit from near-term catalysts.
Market snapshot:
- STOXX 600: flat at 650.84 points (0713 GMT)
- Technology sector: -1.6%
- ASML: down ~4%
- Infineon: down ~4%
- Siemens Energy: down 5.5%
- Saab: up 5.3%
- Shell: up 2.2%
- Nasdaq futures: down nearly 1%