Europe close: Stocks lower on US inflation, AI jitters

13th Feb 2026 16:07

(Sharecast News) - European shares closed in negative territory on Friday after another sell-off on Wall Street overnight, driven by renewed jitters around a potential artificial intelligence bubble, as investors digested the latest inflation data out of the US.

The pan-European Stoxx 600 slipped 0.12% to 617.80.

"A gloomy session on Wall Street on Thursday put investors in a grumpy mood at the end of the trading week," said Russ Mould, investment director at AJ Bell.

He added that "association with AI has gone from party to peril as investors reappraise what the technology means for companies," with concerns ranging from excessive spending to fears that AI "will disrupt multiple industries," creating "a cocktail of worries" for broader market sentiment.

Germany's DAX bucked the broader trend, rising 0.2% to 24,903.39, while France's CAC 40 fell 0.37% to 8,309.88.

The UK's FTSE 100 outperformed with a 0.42% gain to 10,446.35, which Mould said "bucked the sell-off across Europe and Asia on Friday thanks to strength in industrials, banks and miners."

Patrick Munnelly, market strategy partner at TickMill, said markets were "mirroring a cautious global market sentiment during a week dominated by concerns over AI-driven disruptions."

US consumer prices edge higher in January

Fresh US inflation data showed consumer prices edged higher in January.

According to the Bureau of Labor Statistics, headline CPI rose 0.2% month-on-month, while the annual rate eased to 2.4% from 2.7% in December, below expectations for a 0.3% monthly increase and 2.5% annual rise.

Shelter and food prices both increased 0.2%, while energy costs fell 1.5%.

Core CPI rose 0.3% on the month and 2.5% year-on-year.

Food prices were 2.9% higher than a year earlier, while the energy index slipped 0.1% annually.

Munnelly noted earlier that "headline CPI is expected to moderate," with core inflation "still above the Federal Reserve's target but indicative of disinflation," adding that weak demand and sluggish retail sales point to "economic imbalances despite strong January payrolls."

In Europe, the EU's trade surplus narrowed again in December.

The 27-nation bloc posted a surplus of €12.9bn, down from €13.9bn a year earlier, as chemical, machinery and vehicle exports declined.

In the eurozone, the surplus fell to €12.6bn from €13.9bn in December 2024.

Exports from the single currency area rose 3.4% year-on-year to €234bn.

However, EU exports to the US fell 12.6%, reducing the surplus with Washington to €9.3bn, while the deficit with China widened to €26.8bn from €24.5bn.

Separate data showed the eurozone economy grew 0.3% in the fourth quarter, with employment up 0.2%, unchanged from the prior quarter.

In the UK, retail footfall declined 0.6% year-on-year in January, an improvement on December's 2.9% fall, according to the BRC-Sensormatic monitor.

Retail parks saw footfall rise 1.1% after a 2.5% drop in December, while shopping centres recorded a 0.8% decline compared with a 5.1% slump a month earlier.

High street footfall fell 1.9%, compounding December's 0.9% drop.

Sensormatic's Andy Sumpter said January marked a "clear improvement on December", though Storm Goretti had disrupted travel and visits.

British Retail Consortium chief executive Helen Dickinson said signs of a recovery offered "cautious optimism".

Trade developments also remained in focus, as US president Donald Trump was reportedly reviewing tariffs of up to 50% on steel and aluminium imports, with the Financial Times reporting that some products could be exempted and expansion plans halted in favour of targeted national security probes.

The move could benefit countries including the UK, Mexico, Canada and EU members.

Meanwhile, the United States and Taiwan finalised a reciprocal trade agreement setting a 15% US tariff on Taiwanese imports, down from 20%, while Taipei committed to eliminate or reduce tariffs on 99% of US goods and purchase nearly $85bn of American products between 2025 and 2029.

The package included $44.4bn in liquefied natural gas and crude oil, $15.2bn in civil aircraft and engines, and $25.2bn in power grid, marine and steelmaking equipment.

It also addressed non-tariff barriers and formalised earlier pledges of up to $250bn in Taiwanese investment in the US, including $100bn already committed by Taiwan Semiconductor Manufacturing Co, as Washington looked to reshore more semiconductor production.

L'Oreal in the red on fourth quarter miss, Safran jumps

In equities, L'Oreal fell 4.89% after the cosmetics group's fourth-quarter sales missed forecasts.

Norsk Hydro dropped 3.3% despite reporting a smaller-than-expected decline in fourth-quarter profits, as a weak outlook for its extrusions arm weighed.

Delivery Hero was down 4.55% following results updates, while NatWest Group slipped 2.76% even after reporting fourth-quarter profit of £1.48bn, ahead of estimates of £1.24bn.

Mould said "NatWest's marginally better than expected headline numbers and upgraded guidance for returns have been helped by growth in its private banking and wealth division," noting that expansion into fee-paying affluent customers should make profits "more consistent and reliable."

He added that full privatisation and a relaxation of bonus rules gave the bank greater flexibility, and that for shareholders "there is unlikely to be significant disquiet given NatWest's generosity with share buybacks and dividends and the recent strong showing for the share price."

Munnelly observed that despite a 24% surge in annual profits and new performance targets, the shares fell as "the positive news had already been priced into the stock."

On the upside, Safran jumped 8.17% after the aerospace group forecast higher revenue and earnings in 2026, supported by strong aftermarket demand for civil jet engines.

Reporting by Josh White for Sharecast.com.