Europe close: Stocks mixed as tech sell-off continues

5th Jun 2026 15:01

(Sharecast News) - European shares closed a choppy session mixed on Friday after a sell-off in US and Asian technology stocks overnight and data showing the eurozone economy contracted in the first quarter.

The pan-European Stoxx 600 slipped 0.29% to 622.66.

Germany's DAX fell 0.75% to 24,759.05 and France's CAC 40 was down 0.32% at 8,218.24, while London's FTSE 100 rose 0.08% to 10,368.05.

In commodities, Brent crude futures were last down 1.76% on ICE at $93.36 per barrel, and the NYMEX quote for West Texas Intermediate dropped 2.78% to $90.45.

Investors moved to limit exposure to artificial intelligence-linked stocks after a gloomy forecast from Broadcom for its AI chips weighed on sentiment across the sector.

Axel Rudolph, chief technical analyst at IG, said: "After nine consecutive weeks of gains, the S&P 500 ended its bullish run this week.

"It was nonetheless the longest weekly winning streak since late 2023 and, before that, early 2004.

"More than doubling monthly US job growth when compared to market expectations and a significant upward revision in the previous month's employment numbers provoked a sell-off in most European and US stock indices," he added.

"US Treasury yields jumped by seven basis points to a near two-week high at 4.54% after the jobs report while the US dollar appreciated to a two-month high."

Euro area Q1 GDP revised sharply lower

On the economic front, Eurostat revised eurozone first-quarter GDP sharply lower, showing the bloc contracted for the first time in more than three years.

GDP fell 0.2% in the first three months of 2026, compared with earlier estimates for 0.1% growth.

The contraction followed 0.2% growth in the fourth quarter of 2025 and was the first quarterly fall since the final quarter of 2022.

Eurostat said the revision was largely driven by a much steeper downturn in Ireland than previously reported, where GDP slumped 12.1%, the sharpest quarterly contraction on record.

The fall was mainly linked to weaker exports from multinational pharmaceutical groups headquartered in the country.

In the UK, retail footfall fell in May, although the decline was much smaller than in April.

The BRC-Sensormatic monitor showed total footfall down 2.6% year-on-year, compared with a 10.7% slump the month before.

High street footfall fell 1.5%, retail parks declined 0.5%, and shopping centres were down 2.4%.

Helen Dickinson, chief executive of the British Retail Consortium, said May marked a significant improvement on April's double-digit fall, but that record-breaking temperatures at the end of the month had kept shoppers away from shopping centres and retail parks.

She said households remained anxious about the long-term impact of the Iran conflict and inflation, and urged the government to address non-commodity charges pushing up energy costs.

UK house prices meanwhile unexpectedly fell in May, according to lender Halifax.

Prices declined 0.1% month-on-month, matching April's fall and missing expectations for a 0.1% rise.

On the year, prices were up 0.5%, below forecasts for a 1% increase.

Amanda Bryden, head of mortgages at Halifax, said price trends continued to reflect uncertainty linked to the Middle East, with higher inflation expectations keeping borrowing costs elevated and stretching affordability.

UK businesses also raised their expectations for price rises over the coming year.

The Bank of England's Decision Maker Panel showed firms expected their own prices to rise 4.0% over the next 12 months, up from 3.8% in the previous survey.

The survey also found that 57% of firms expected the recent energy shock to push them to raise prices, while 68% expected profit margins to be hit.

Patrick Munnelly, market strategy partner at TickMill, said the FTSE 100 outperformed several global markets despite the broader risk-off tone, as investors took some comfort from signs that the inflationary fallout from the Middle East energy shock may be less severe than feared.

"The main support came from the Bank of England's latest Decision Maker Panel survey, which showed that British businesses expect to raise prices at a slower pace over the coming year than they had anticipated previously," he said.

"Among more than 2,000 UK companies, 57% said they expected to lift prices in response to the energy shock, down seven percentage points from April."

Munnelly said the decline suggested that some of the initial pressure from higher energy costs linked to the Iran conflict may be easing before becoming fully embedded in corporate pricing behaviour.

"That mattered because the market's biggest fear has not simply been higher oil prices but a second-round inflation cycle where firms pass on energy costs, workers demand compensation, and the Bank of England is forced into a more aggressive tightening path," he said.

Across the Atlantic, US non-farm payrolls rose by 172,000 in May, well ahead of expectations for an 85,000 increase, while the unemployment rate held steady at 4.3%.

Leisure and hospitality added 70,000 jobs, local government employment rose by 55,000, and health care added 35,000.

March and April payroll gains were also revised higher by a combined 93,000.

Chipmakers, tech stocks join global rout

In equity markets, the AI-linked sell-off weighed on European chipmakers and related stocks, with Infineon Technologies, BE Semiconductor, ASML, ASM International and STMicroelectronics all lower.

Nokia was also in the red as part of the wider unwind in technology shares, following several consecutive days of strong gains for the sector.

Reporting by Josh White for Sharecast.com.