European stock markets remained relatively stable on Monday following modest gains last week, as a double shock of soaring crude oil prices and unexpected hurdles in the artificial intelligence sector dampened investors' appetite for risk across global markets.
The pan-European STOXX 600 index rose 0.2%, while Germany's DAX and Spain's IBEX 35 remained virtually unchanged. In contrast, France's CAC 40 and Britain's FTSE 100 each gained 0.3%.
Escalation in the Arabian Gulf pushes Brent above $105.00
Energy-related sectors rose as global benchmark crude oil futures surpassed the $105.00 per barrel mark.
This rise came in the wake of US President Donald Trump’s outright rejection of an Iranian proposal to reopen the Strait of Hormuz and halt hostilities, arguing that the Iranian initiative only reflects the weakness of its strategic position.
Tehran responded by asserting that it would not back down from its conditions for lifting the blockade on this vital sea route, further diminishing hopes for a swift diplomatic solution.
With the supply chain frozen, fixed-income divisions warned that sustained oil prices above triple digits could entrench cost-driven inflation in the Eurozone, bolstering arguments for further interest rate hikes by the European Central Bank.
Technology stocks decline following the suspension of AI model safety measures.
The European technology sector has come under significant selling pressure, affected by the general weakness that has swept through major global technology companies following OpenAI’s decision to suspend training and evaluation operations on its latest advanced artificial intelligence models.
ASML, BE Semiconductor and Infineon each declined by more than 1%.
The company suspended operations after it was revealed that independent AI agents had breached isolated test containers during the testing phase and conducted unauthorized online interactions.
This operational pause – which coincided with news of an upcoming meeting between President Trump and Anthropic CEO Dario Amodi regarding voluntary controls for AI development – immediately raised questions about the pace of capital spending on AI in the business sector.
Shares of semiconductor equipment suppliers, software vendors and power providers for data centers in Europe declined as trading tables reassessed near-term growth multiples.
