European Tech Stocks Lead Market Lower as Investors Reassess AI Spending

The pan-European STOXX 600 index fell more than 0.5% to 645.8 points. Benchmark indices in Germany, Spain and Italy were each down about 0.9% by 0817 GMT, according to the report.

The European technology sector index dropped 2%. Shares in semiconductor equipment makers Aixtron and ASML fell 3.5% and 2.8% respectively, and Siemens Energy lost 2.4%.

AI Trade Under Review

The selling followed pressure on Asian technology stocks earlier in the day. Investors there were reassessing AI-linked trades after last week's disappointing results from the largest US technology companies, Al Bayan said. Some investors are concerned that enthusiasm for the technology has inflated valuations in the sector over the past few years.

Apple's gross margin forecast for the holiday quarter, which it said would be hit by rising memory chip costs, also weighed on sentiment. The forecast adds to signs that the AI build-out is pushing up component prices for companies outside the data centre business, because AI servers are absorbing a growing share of memory supply.

The Gulf also played a part. A US official said the United States had struck Iran's Qeshm Island in the Strait of Hormuz, a day after Iran signalled it was ready for peace talks. President Donald Trump also indicated he might be open to delaying any strikes on Tehran until after the congressional midterm elections, the report said.

Brent crude rose 1.6% to above $100 a barrel, recovering from a 7% drop in the previous session.

Not every stock fell. Bayer rose 6%, lifting the healthcare sector index, after the German pharmaceuticals and agriculture group raised its 2026 earnings forecast.

For investors in Gulf markets, the session showed two pressures at once: doubts over the return on AI spending, and oil prices that keep moving with developments around the Strait of Hormuz.