Europe close: Stocks weaker as global tech rout continues
By Josh White
Date: Tuesday 07 Jul 2026
(Sharecast News) - European shares closed lower on Tuesday as oil prices rose on reports that a tanker had been hit in the Strait of Hormuz, while technology stocks fell after another sell-off in Asia driven by persistent concerns over artificial intelligence valuations.
The pan-European Stoxx 600 fell 0.65% to 646.29.
Germany's DAX dropped 1.37% to 25,465.25 and France's CAC 40 slipped 0.51% to 8,436.24, while London's FTSE 100 rose 0.13% to 10,665.88.
In commodities, Brent crude futures were last up 2.96% on ICE at $74.12 per barrel, while the NYMEX quote for West Texas Intermediate gained 2.77% to $70.45.
Axel Rudolph, chief technical analyst at IG, said fresh volatility for chip producers and a rotation into traditional economic sectors had briefly helped the Dow hit a record high before it also retreated.
"Asian and US technology stocks came under heavy selling pressure as investors questioned the sustainability of the AI-driven chip boom, despite Samsung Electronics forecasting a 19-fold jump in second-quarter operating profit that beat expectations," he said.
Rudolph said Samsung shares fell as much as 10%, wiping more than $100bn off its market value, while South Korea's Kospi slumped 8% and Japan's Nikkei also declined on losses among chipmakers.
Technology stocks were under pressure after trading on South Korea's stock market was temporarily halted, with the Kospi down by as much as 8% at one point.
David Morrison, senior market analyst at Trade Nation, said Asia-Pacific stock indices were lower across the board, with the weakness led by semiconductor and electronics companies.
"As is often the case, it can be better to travel than to arrive," he said.
"And it seems that investors are concerned that semiconductor and other AI-adjacent stocks may struggle to maintain such high levels of sales and margins going forward."
Morrison said investors were reducing exposure after the sell-off in Asia-Pacific technology shares spread into US equities and futures, although broader market sentiment remained constructive after a recent rally that had pushed major benchmarks to record highs.
In the US, Rudolph said the Nasdaq 100 fell by more than 2% as semiconductor stocks retreated, while the Dow briefly reached another record high as investors rotated into banks and healthcare stocks.
"Meanwhile, rising Treasury yields, renewed Middle East tensions, and a widening US trade deficit added to broader market uncertainty," he said.
German industrial production rises more than expected
On the economic front, German industrial production rose more than expected in May.
Destatis said price-adjusted production increased 0.9%, comfortably ahead of expectations for a 0.2% rise and up from a revised 0.2% increase in April.
Year-on-year, industrial production was unchanged.
The motor industry drove the increase, with output up 3.6%, while construction production rose 0.9%.
That helped offset a 0.4% decline in the production of intermediate goods.
Carsten Brzeski, global head of macro at ING, said German industrial production was proving resilient despite the US-Iran war.
He said the reopening of the Strait of Hormuz and easing geopolitical tensions should provide a mild tailwind for the German economy, although production expectations remained weak and order books were only gradually improving.
In the UK, house prices ticked higher in June as mortgage rates started to ease.
The Lloyds house price index showed prices rose 0.2% on the month, following a 0.2% fall in May.
It was the first increase in four months and slightly ahead of expectations for a 0.1% rise.
The average property price now stands at £299,330.
On an annual basis, house prices rose 0.6%, up from 0.5% in May.
Lloyds said affordability remained stretched, but that mortgage rates had eased from recent highs, providing some support for buyers.
Amanda Bryden, head of mortgages at Lloyds, said the recent fall in mortgage approvals was not unexpected given the earlier spike in rates, but activity should recover if borrowing costs continue to decline.
She said the market was likely to move at a measured pace, with the outlook dependent on inflation continuing to ease and household confidence improving.
European tech shares join global rout
In equity markets, European technology shares were hit by the global sell-off.
ASML Holding fell 7.28%, STMicroelectronics dropped 7.99%, Infineon Technologies lost 8.26%, and BE Semiconductor Industries declined 6.28%.
Siemens Energy fell 8.88% after Barclays cut the stock to 'underweight' from 'neutral'.
On the upside, Shell rose 0.67% after the energy giant lifted its integrated gas production outlook.
Reporting by Josh White for Sharecast.com.
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