Europe midday: Shares slide as EU cuts growth forecasts on inflation worries

21st May 2026 11:06

(Sharecast News) - European shares were lower and oil prices started heading northwards again on Thursday as even record earnings from Wall Street darling Nvidia failed to lift sentiment, with gloomy economic data caused by the Iran war weighing on investors.

The pan-regional Stoxx 600 index was down 0.4% to 617.78 points with all major bourses following suit.

Oil prices rebounded above $107 a barrel despite the usual comments from US President Donald Trump that his war of choice on Iran would be over soon.

Trump claimed overnight that peace talks with Tehran were in the final stages, sending the price of Brent crude down around 5%. On Thursday it was up 2.17% to $107.30 a barrel.

On the economics front, the European Union cut its forecast for economic growth this year driven by worries over inflation triggered by the war. The European Commission projected GDP growth in the EU would slow to 1.1% this year, compared with a previous estimate of 1.4%.

Inflation in the EU is expected to reach 3.1% in 2026, up a full percentage point from the last forecast, before easing back to 2.4% in 2027.

Meanwhile, construction output across the eurozone bounced back in March after two consecutive months of declines, powered by a strong increase in civil engineering works, though activity is likely to have come under increased pressure in recent months as a result of uncertainty caused by the Iran war.

Total production in construction across the single-currency region rose 0.8% over the month, following a 0.8% decline in February and a 1.1% fall in January.

On Wall Street computer chip giant Nvidia reported after the final bell, smashing first-quarter earnings and revenue expectations powered by continuing demand from artificial intelligence data centres.

Revenue came in at $81.62bn for the quarter, beating expectations of $78.86bn. Earnings also exceeded Wall Street forecasts of $1.76 per share with a reported figure of $1.87 per share. However, shares were down in aftermarket trade.

In equity news, UK defence group Qinetiq surged on results, while Hexagon shares plunged, snapping a run of market outperformance.

Reporting by Frank Prenesti for Sharecast.com