European stocks erased their weekly gain as concerns over the US Democratic sweep and its impact on the AI trade drove losses and volatility. The Stoxx Europe 600 Index fell 1.7% by 1:56 p.m. in London, marking a moderate decline compared to Thursday’s 4.4% drop in the S&P 500 and 6.4% plunge in the Nasdaq 100, its worst since March 2020.
European sectors mostly declined, with travel and leisure the only gainers. Strong US job growth and lower unemployment signaled labor-market resilience, while Wall Street showed signs of recovery with higher S&P 500 futures and upbeat Nasdaq 100 contracts.
Investors rapidly shifted from AI stocks to defensive assets amid wild market swings. "Reallocations are to be expected, and high volatility will likely persist for a few days, however, the risk of a prolonged correction is not yet considered very high," said Guillermo Hernandez Sampere, head of trading at MPPM.
Teleperformance SE plunged 22%, its steepest drop since March 2024, after cutting full-year sales guidance. Glanbia Plc fell 8% following a Morgan Stanley downgrade. Despite Friday’s decline, European stocks are viewed as attractive due to steady industrials, banks, and commodities amid tech volatility. Euronext CEO Stephane Boujnah called Europe "a very safe place" for return risk profile in troubled times.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing