By FinanceMarkets.info — August 4, 2026, 12:00 CEST
European stock markets traded higher around midday on Tuesday, with the STOXX Europe 600 touching a fresh record as technology, mining and defence shares outweighed heavy losses in Zalando and Lufthansa.
The pan-European benchmark was approximately 0.4% higher at 654.78 around the late-morning reference point, after briefly reaching an all-time high of 656.85. Germany’s DAX led the major national indices, supported by Bayer and semiconductor stocks, while the CAC 40 and FTSE 100 also advanced.
The positive session followed another technology-driven rally on Wall Street. Strong forecasts from U.S. artificial-intelligence companies reinforced confidence that the global AI infrastructure cycle remains intact, helping European semiconductor suppliers recover from recent volatility.
Corporate earnings produced sharp differences between individual stocks. BE Semiconductor Industries, Soitec and Bayer ranked among the leading gainers, while Zalando and Lufthansa suffered double-digit declines following disappointing outlooks.
European Market Snapshot at 12:00 CEST
| Index | Approximate move | Market driver |
|---|---|---|
| STOXX Europe 600 | +0.4% | Technology, mining and defence stocks |
| DAX | +0.8% to +0.9% | Bayer, Infineon and Siemens Energy |
| CAC 40 | +0.3% to +0.5% | Technology and industrial shares |
| FTSE 100 | +0.4% | BP, miners and AstraZeneca |
| FTSE MIB | +0.7% | Broad risk-on sentiment |
| AEX | +0.6% | ASML and BE Semiconductor |
| IBEX 35 | +0.1% | More cautious Spanish trading |
Figures are approximate intraday changes recorded around the European midday period. They are not closing prices and may change during the afternoon session.
Technology Stocks Lead the European Rally
Technology was one of Europe’s strongest sectors, advancing approximately 1.7%.
European semiconductor stocks benefited from renewed optimism about artificial-intelligence spending. The move followed encouraging forecasts from Palantir Technologies and ON Semiconductor in the United States, which provided further evidence of strong demand for AI software, computing infrastructure and data-centre components.
BE Semiconductor Industries gained approximately 5.6% after Berenberg upgraded the Dutch chip-equipment company to “buy.” The investment bank argued that recent weakness in the share price had created a more attractive entry point.
French semiconductor-materials producer Soitec climbed around 5.1%, while Aixtron, ASML and Infineon gained between approximately 1.3% and 3.6%.
These companies occupy different parts of the semiconductor supply chain. ASML manufactures advanced lithography systems, BE Semiconductor provides assembly equipment, Soitec produces engineered semiconductor materials, and Infineon supplies power-management and automotive chips.
Their simultaneous advance demonstrated how quickly investor confidence can return to the European technology sector when U.S. AI demand remains resilient.
Midday Gainers
| Company | Approximate move | Main catalyst |
|---|---|---|
| BE Semiconductor Industries | +5.6% | Berenberg upgrade to “buy” |
| Soitec | +5.1% | Broad semiconductor rally |
| Infineon | Up within a 1.3%–3.6% range | Renewed AI and chip-sector optimism |
| Aixtron | Up within a 1.3%–3.6% range | Strength across semiconductor equipment |
| Bayer | +3.0% | Unexpected increase in quarterly operating profit |
| ASML | Around +2% | Global technology rebound |
| Mining sector | +2.6% | Stronger metals prices |
| Aerospace and defence sector | +1.8% | Continued European defence demand |
Movements are rounded from intraday quotations and may differ slightly by trading venue and timestamp.
Bayer Gains on Surprise Profit Increase
Bayer shares rose approximately 3% after the German pharmaceutical and agricultural group reported an unexpected 1.9% increase in quarterly adjusted operating profit.
The result was supported by stronger demand for seeds, helping the company overcome continued concerns surrounding its legal liabilities and broader operational challenges.
The share-price reaction suggests that investors were positioned for a weaker result. Bayer remains a complicated recovery story, but an unexpected improvement in underlying profitability gave the market a reason to reassess its near-term earnings trajectory.
The company’s performance also helped the DAX outperform several other European indices during the morning.
Mining Stocks Advance With Metals Prices
European mining shares gained approximately 2.6%, making the sector one of the strongest performers in the STOXX 600.
The rally followed firmer metals prices and continuing demand for copper and other materials required for electrification, renewable-energy projects and data-centre construction.
Mining companies listed in London provided significant support to the FTSE 100. The British benchmark also benefited from gains in BP as oil prices recovered from Monday’s sharp decline.
Brent crude rose approximately 1.4% to around $84.95 per barrel after dropping about 7% during the previous session. Renewed attacks on shipping near the Strait of Hormuz reminded investors that energy supplies remain exposed to the U.S.–Iran conflict.
Higher commodity prices can support the revenues of European energy and mining companies, but they also create inflation risks for the wider economy.
Defence Stocks Continue to Attract Investors
Europe’s aerospace and defence sector advanced around 1.8%.
The sector continues to benefit from increased military spending across the continent and expectations that European governments will expand their domestic defence capabilities over the coming years.
Analysts at UBS Global Wealth Management said that Europe could benefit from locally driven developments, including the region’s intensified focus on defence. They also noted that European corporate results were beginning to confirm a more positive earnings trajectory.
Defence stocks have already enjoyed significant gains, meaning valuations are no longer universally inexpensive. Nevertheless, higher government budgets and long-term order backlogs continue to provide fundamental support.
Midday Losers
| Company | Approximate move | Main catalyst |
|---|---|---|
| Zalando | -16.8% | Lower revenue expectations and narrower profit outlook |
| Lufthansa | -10.6% | Fuel costs and warning of lower annual operating profit |
| Retail sector | -2.6% | Zalando’s outlook weighs on sentiment |
| Selected travel stocks | Lower | Higher oil and aviation-fuel costs |
Zalando Plunges After Cutting Its Outlook
Zalando was the worst-performing stock in the STOXX 600, falling approximately 16.8%.
The German online fashion retailer said that 2026 revenue and growth were likely to finish in the lower half of its previous guidance range. It also narrowed its forecast for adjusted operating profit.
The market reaction shows how severely investors can punish companies that reduce expectations during earnings season. Even when a business remains profitable, a weaker growth outlook can force analysts to lower revenue, margin and valuation assumptions simultaneously.
Zalando’s decline dragged the broader European retail sector down by approximately 2.6%.
The selloff also raised questions about the strength of European consumer demand. Households continue to face higher energy costs, elevated borrowing expenses and uncertainty surrounding the economic consequences of the Middle East conflict.
Lufthansa Falls as Fuel Costs Hit Profit
Lufthansa dropped approximately 10.6% after warning that annual operating profit could decline.
The airline’s second-quarter operating profit more than halved, with higher fuel costs linked to the U.S.–Iran conflict putting pressure on margins.
Airlines are particularly sensitive to oil-price movements because fuel represents one of their largest operating expenses. Companies can hedge part of their requirements in advance, but rapid and persistent increases eventually affect costs.
Lufthansa’s warning illustrates the uneven impact of higher energy prices on European equities. Oil producers can benefit from rising crude prices, while airlines, transport companies, chemical groups and energy-intensive manufacturers may suffer.
The decline also shows why the broader European index can reach a record even while individual companies experience severe losses.
European Earnings Are Becoming More Supportive
The European earnings season is beginning to provide stronger support for regional equities.
UBS analysts said company reports were corroborating the view that businesses were executing their plans and that Europe’s earnings trajectory was turning more positive.
This matters because European stocks have frequently traded at lower valuations than comparable U.S. companies. A sustained improvement in earnings could help narrow part of that valuation discount.
However, the day’s contrasting reactions also underline that investors remain selective. Bayer was rewarded for exceeding expectations, while Zalando and Lufthansa were punished for reducing confidence in their outlooks.
The market is therefore not simply rising on optimism. Investors are differentiating sharply between companies capable of protecting margins and those exposed to weaker demand or higher costs.
National Markets: Germany Leads
Germany’s DAX gained approximately 0.8% to 0.9%, outperforming the other major European benchmarks.
Bayer, Infineon and Siemens Energy were among the sources of support. Germany’s relatively high exposure to industrial, technology and defence companies made it one of the principal beneficiaries of Tuesday’s sector rotation.
France’s CAC 40 gained approximately 0.3% to 0.5%, supported by technology and industrial stocks.
London’s FTSE 100 advanced around 0.4%. BP and mining companies contributed to the rise, while AstraZeneca rebounded by approximately 2% during the morning session.
Italy’s FTSE MIB increased around 0.7%, and the Netherlands’ AEX gained approximately 0.6%, supported by ASML and BE Semiconductor.
Spain’s IBEX 35 was more subdued, rising only around 0.1%.
Oil and Geopolitics Remain Major Risks
The U.S.–Iran conflict remains one of the principal risks facing European markets.
Brent crude recovered to approximately $84.95 per barrel after attacks on shipping in the Strait of Hormuz renewed concerns about global energy flows. Although prices remained below recent highs, the possibility of further disruption continues to influence inflation expectations and corporate costs.
European markets have repeatedly moved between optimism over possible diplomatic progress and concern that the conflict could intensify.
The effects are distributed unevenly:
- energy companies benefit from higher oil and gas prices;
- defence companies gain from increased military spending;
- airlines face higher fuel costs;
- chemical and industrial businesses face greater energy expenses;
- consumers have less disposable income when transport and utility costs rise.
This explains why the overall index can advance even while economically sensitive sectors remain under pressure.
Wall Street Could Influence the Afternoon Session
European investors were also monitoring positive U.S. futures.
Nasdaq futures gained approximately 0.7%, while S&P 500 futures rose around 0.2%. Strong forecasts from Palantir and ON Semiconductor reinforced confidence in artificial-intelligence demand.
The previous Wall Street session had already produced a 1.5% rise in the S&P 500, bringing the index close to its record high, while the Dow Jones Industrial Average reached a closing record.
Approximately 84% of the S&P 500 companies that had reported second-quarter results were exceeding earnings estimates, according to LSEG data cited by Reuters.
If Wall Street opens higher, European stocks could retain their gains into the close. A reversal in U.S. technology shares would create a greater risk for ASML, BE Semiconductor, Infineon and other European chip stocks.
What to Watch During the Afternoon
1. Whether the STOXX 600 holds its record
The index reached an intraday high of 656.85. Investors will watch whether it can finish near that level or whether profit-taking develops.
2. Wall Street’s opening
European technology stocks have become increasingly sensitive to U.S. AI and semiconductor sentiment.
3. Oil prices
A further rise in Brent crude could support energy stocks but increase pressure on airlines and consumer-oriented businesses.
4. Bond yields
Higher long-term yields remain a risk for highly valued growth stocks. They also increase financing costs across the European economy.
5. Company earnings
The earnings calendar remains busy, and individual updates can produce double-digit movements, as demonstrated by Zalando and Lufthansa.
Midday Outlook
The European market’s record high is encouraging, but the session is less uniformly positive than the headline index suggests.
Technology, mining, defence and selected healthcare stocks are driving the advance. Retail and airline shares are moving sharply in the opposite direction.
The main positive signal is that European earnings appear to be improving at a time when AI investment, defence spending and infrastructure demand remain supportive.
The principal risks are higher energy prices, rising bond yields and a possible deterioration in consumer demand.
For the remainder of Tuesday’s session, Wall Street’s opening and movements in oil prices are likely to determine whether the STOXX 600 can consolidate its record or retreats from the morning peak.
Sources
- Reuters — European stocks touch record high as earnings and technology gains lift sentiment
- Reuters — Global stocks rise despite Iran tensions as oil rebounds
- Reuters — Nasdaq futures supported by strong AI forecasts
- Associated Press — Oil prices and global shares move higher
- STOXX — STOXX Europe 600 index information
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Intraday market prices can change rapidly and may differ across data providers and trading venues.
