### European Stocks Tumble on Recession Fears
European stocks experienced a significant decline on Friday, marking multi-month lows across several regional markets. This drop stems from concerns that weak U.S. economic data and a delayed interest rate cut by the Federal Reserve could push the world's largest economy toward a recession.
Disappointing earnings reports from major U.S. corporations and weak economic data from Europe further exacerbated the market downturn.
**Tech Sector Hit Hard**
Tech stocks faced additional pressure after U.S. chipmaker Intel announced plans to cut over 15% of its workforce in a drastic cost-reduction effort.
**Market Performance**
The pan-European Stoxx 600 plummeted by 2.73%. Key national indices also suffered:
- U.K.’s FTSE 100 finished down 1.31%
- Germany’s DAX dropped 2.33%
- France’s CAC 40 fell 1.61%
- Switzerland’s SMI plunged 3.59%
Other European markets including Austria, Belgium, Denmark, Finland, Greece, Netherlands, Norway, Sweden, and Turkiye witnessed losses between 2% and 4%.
Markets in Poland, Portugal, Russia, and Spain ended down by 1% to 2%, while Iceland posted a modest decline.
**Sector-Specific Performance**
In the UK, Intermediate Capital Group shares fell by over 7%. Losses of 6% to 7% were seen in Diploma, JD Sports Fashion, Melrose Industries, and Barclays.
3i Group, Mondi, Pershing Square Holdings, Ashtead Group, Burberry Group, Howden Joinery, Kingfisher, Marks & Spencer, Standard Chartered, Scottish Mortgage, NatWest Group, M&G, Rolls-Royce Holdings, HSBC Holdings, Anglo American Plc, Prudential, and Fresnillo saw declines of 3% to 6%.
Conversely, British Airways parent company IAG rose nearly 5% following strong first-half results and the announcement of its first dividend since the onset of the COVID-19 pandemic.
Other UK gainers included Haleon, United Utilities, Severn Trent, GSK, National Grid, SSE, Unilever, and Reckitt Benckiser, which rose by 1% to 3%.
In Germany, RWE and Siemens Energy each fell by more than 7.5%. Zalando, Deutsche Bank, Infineon, Commerzbank, HeidelbergCement, Siemens, Sartorius, Daimler Truck Holding, and Deutsche Post lost 4% to 6%.
Puma, Merck, Rheinmetall, Adidas, SAP, Symrise, Volkswagen, Mercedes-Benz, BASF, Siemens Healthineers, Munich RE, Fresenius, BMW, and Allianz ended down 1% to 4%.
Qiagen, Vonovia, Brenntag, Deutsche Telekom, and Bayer saw moderate gains.
In France, Credit Agricole plummeted more than 7%, and Societe Generale ended down 6.25%. Other notable decliners included STMicroelectronics, Schneider Electric, Accor, Publicis Groupe, Renault, and Teleperformance, which fell 4% to 5.6%.
Stellantis, Dassault Systemes, Legrand, Saint Gobain, BNP Paribas, ArcelorMittal, Unibail-Rodamco, Hermes International, Vivendi, Kering, LVMH, and Edenred also declined sharply.
Engie gained 2.3% after raising its profit guidance for 2024, attributing the revision to a robust first-half performance in power generation and lower-than-anticipated financial costs. Danone climbed approximately 2.7%, and AXA and Sanofi also posted strong gains.
**Economic Updates**
In economic news, France's industrial production saw a recovery in June, primarily due to a rebound in transport equipment output, according to France's INSEE. Industrial production grew 0.8% month-over-month, reversing a 2.2% decline in May but falling short of the anticipated 1% growth. Manufacturing output similarly grew by 0.8%, reversing a 2.7% decline in May.
In Switzerland, consumer price inflation remained steady at 1.3% in July, unchanged from June, based on data from the Federal Statistical Office.
In the U.S., the Labor Department reported a 114,000 increase in non-farm payroll jobs for July, falling short of economists’ expectations of 175,000. The revised figure for June was 179,000, down from the originally reported 206,000. Meanwhile, the unemployment rate rose to 4.3% in July from 4.1% in June, the highest level since October 2021.
