European Stocks Drop on Poor ASML Results and Middle East Tensions
European stocks dropped on Wednesday as poor results from ASML Holding NV and rising tensions in the Middle East weighed on investor sentiment. The Stoxx Europe 600 Index fell 0.6%, with the technology sector leading the losses.
ASML Results
ASML, Europe’s largest chip-equipment maker, reported a drop in third-quarter profit and warned of a further decline in the fourth quarter. The company said that the decline in demand for its products was due to the ongoing trade war between the United States and China. The company’s shares fell as much as 8.2%, the biggest intraday drop since October 2018.
Middle East Tensions
Tensions in the Middle East also weighed on investor sentiment. The United States has imposed sanctions on Iran in response to its nuclear program, and the situation has been further complicated by the recent attacks on Saudi Arabian oil facilities.
Other Sectors
The banking sector was also hit by the news, with shares of Deutsche Bank AG and Commerzbank AG both falling more than 2%. The automotive sector was also down, with shares of Volkswagen AG and Daimler AG both falling more than 1%.
Oil Prices
Oil prices were also affected by the news, with Brent crude falling 0.7% to $60.50 a barrel. The decline in oil prices was due to the rising tensions in the Middle East, as well as the weak demand for oil due to the ongoing trade war between the United States and China.
European Markets
The German DAX Index fell 0.7%, while the French CAC 40 Index dropped 0.6%. The U.K.’s FTSE 100 Index was down 0.4%.
U.S. Markets
U.S. stocks were also affected by the news, with the Dow Jones Industrial Average falling 0.3% and the S&P 500 Index dropping 0.2%.
Outlook
The outlook for European stocks remains uncertain, as investors remain concerned about the ongoing trade war between the United States and China, as well as the rising tensions in the Middle East. In addition, the weak demand for chip-making equipment due to the trade war is likely to continue to weigh on the technology sector.