European Stocks Flat as Strong Earnings Offset Tech Sector Decline

European stock markets were little changed in Tuesday trading, as a sharp selloff in the technology sector was offset by a series of strong corporate earnings reports from major consumer and luxury goods companies. The pan-European STOXX 600 index was flat, holding at 645.32 in early trading, according to Reuters.

Tech Stocks Under Pressure

The technology sector was the primary drag on European indices, falling 0.8% and extending a nearly 2% loss from the previous session. The decline was triggered by a report from *The Information* on Monday stating that China has begun manufacturing its own domestically developed deep-ultraviolet (DUV) lithography machines.

This development poses a potential long-term competitive threat to Dutch firm ASML, which has long dominated the market for this critical chip-making equipment. Shares of ASML fell 2% in response to the news, contributing to a broader selloff that had already hit U.S. and Asian semiconductor stocks.

Earnings Provide Key Support

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Providing a crucial counterbalance to the tech downturn were upbeat earnings from several key European firms, which sent the personal and household goods sector up 1.8%.

• Unilever (ULVR) shares jumped 5.3% after the consumer goods giant reported second-quarter sales growth that surpassed analyst estimates, driven by both higher volumes and prices.
• Luxury conglomerate LVMH saw its stock climb 2.5% following a reported 3% increase in second-quarter sales, which the company attributed to resilient demand from U.S. consumers.
• Mercedes-Benz (MBGn) gained 3.3% after the German automaker posted a 22% rise in second-quarter operating profit, though it also cautioned about future weakness in its core cars business.

Market Outlook

Investors are now looking ahead to a busy week for economic and corporate news. The U.S. Federal Reserve is scheduled to announce its latest monetary policy decision on Wednesday. Market participants will also be closely watching for quarterly results from major U.S. technology companies for further insight into the health of the global economy and the sustainability of the recent AI-driven market rally.