European stock markets moved lower on Thursday as investors sold AI and semiconductor shares ahead of the latest U.S. nonfarm payrolls report. The pan-European STOXX 600 edged down in early trading, with technology stocks leading the decline.
Chip-related names were among the weakest performers. Soitec fell more than 5%, while Aixtron dropped more than 3% as the pressure on AI-linked equities widened across the sector.
AI Stocks Face Renewed Pressure
The pullback in European tech reflects broader global weakness in artificial intelligence stocks. Recent concerns over high valuations and the rising cost of AI infrastructure have added volatility to the sector.
Major European semiconductor companies including ASML, Infineon Technologies, and STMicroelectronics have also been hit during the recent selloff. That weakness comes after a strong second quarter for global equities, when gains were helped by renewed enthusiasm around the AI trade.
Jobs Report in Focus
Markets are now waiting for the U.S. nonfarm payrolls report, which could shape expectations for Federal Reserve policy. Economists expect June jobs growth to slow to around 110,000, with unemployment seen steady at 4.3%.
The labor market data matter because stronger-than-expected payrolls have previously triggered sharp moves in equities. A hotter-than-expected report earlier in June helped fuel a steep selloff in U.S. tech stocks and lifted expectations for a Fed rate hike later this year.
European Outlook Remains Cautious
The broader mood in Europe is also being shaped by a softer regional growth outlook. S&P Global expects European economies to contract quarter on quarter in the second quarter, with subdued growth likely to continue through the rest of 2026.
There are some signs of renewed investor interest. European equity ETFs attracted $1.5 billion in inflows in the week to June 19, the first positive week after 10 straight weeks of outflows, according to Morningstar estimates cited by Reuters.
