European stock markets moved lower on Friday as a global technology selloff and rising geopolitical tensions in the Middle East dampened investor sentiment, extending weakness across major equity markets.
The decline mirrored losses seen across Asia and U.S. futures, where investors continued to retreat from high-growth technology stocks amid mounting uncertainty over artificial intelligence-related investments. The selloff persisted despite upbeat outlooks this week from semiconductor leaders, including ASML and Taiwan Semiconductor Manufacturing Co. (TSMC), highlighting growing caution across the sector.
Japan’s Nikkei index officially entered correction territory, while Nasdaq futures dropped more than 1%, reflecting broader concerns over the outlook for technology shares.
By 0849 GMT, the pan-European STOXX 600 index had fallen 0.6% to 639.49 points, putting the benchmark on course for a modest weekly decline and extending its losses over the past two weeks to roughly 2%.
Technology stocks led the downturn, with the sector falling 2.3%. Chipmakers including Soitec, ASM International (ASMI), and ASML declined between 4% and 6% as investors reduced exposure to semiconductor shares.
Defensive sectors, however, attracted fresh buying. Utilities gained 1.3%, while the luxury goods sector remained the strongest performer for the week, reflecting a broader shift toward traditionally resilient industries.
According to Ipek Ozkardeskaya, senior analyst at Swissquote Bank, the current rotation away from technology may prove temporary given the challenging macroeconomic backdrop.
She noted that rising bond yields, higher borrowing costs and escalating geopolitical risks continue to pressure smaller companies and non-technology sectors, which remain more vulnerable than large-cap technology firms.
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