European shares dropped on Thursday due to a rise in US Treasury yields and a slew of weak earnings reports, ahead of the European Central Bank’s policy decision later in the day.

The pan-European STOXX 600 index fell 1.1% as of 7:07 GMT, tracking a slump on Wall Street overnight as longer-dated yields edged closer to the 5% level on fears of higher-for-longer US interest rates.

Meanwhile, the ECB is widely expected to keep its key interest rate unchanged at a record 4% high at 1215 GMT, given faltering economic activity in the euro zone Investors also have an eye on earnings reports, with German chip systems manufacturer Aixtron down 5.8% after its third-quarter orders missed expectations.

European shares steady on mixed earnings

Standard Chartered slumped 12.8% as pre-tax profit dropped 33% in the third quarter, while shares in HelloFresh dropped 9% following a quarterly profit miss.

Automakers were the biggest losers on Thursday, down 2.9%, as luxury carmaker Mercedes-Benz sank 5.5% post a drop in third-quarter earnings.