European stock markets moved lower on Friday as a global technology selloff and rising geopolitical tensions in the Middle East weighed on investor sentiment, extending weakness across major equity markets.
The decline echoed losses seen across Asia and in US futures, where investors kept retreating from high-growth technology stocks amid mounting uncertainty over AI-related investments. The selloff persisted despite upbeat outlooks earlier in the week from semiconductor leaders including ASML and Taiwan Semiconductor Manufacturing Co., a sign of the growing caution running through the sector.
Japan’s Nikkei index officially entered correction territory, while Nasdaq futures dropped more than 1 percent, reflecting broader worries about the outlook for technology shares.
By 08:49 GMT, the pan-European STOXX 600 index had fallen 0.6 percent to 639.49 points, leaving the benchmark on course for a modest weekly decline and stretching its losses over the past two weeks to roughly 2 percent.
Technology stocks led the retreat, with the sector falling 2.3 percent. Chipmakers including Soitec, ASM International, and ASML dropped between 4 and 6 percent as investors trimmed their exposure to semiconductor shares.
Defensive sectors, by contrast, drew fresh buying. Utilities gained 1.3 percent, while luxury goods remained the strongest performer of the week, reflecting a wider shift toward traditionally resilient industries.
The rotation away from technology may prove temporary given the difficult macroeconomic backdrop, according to Ipek Ozkardeskaya, senior analyst at Swissquote Bank. 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.
