European shares retreat from record highs, AI uncertainty weighs
- The STOXX 600 was down 0.2% at 662.64 points
European shares dipped from record highs amid AI trade uncertainty following Nvidia CEO Jensen Huang's resignation. Despite this, the STOXX 600 saw weekly gains, supported by strong earnings.
- Impact of Nvidia CEO's resignation on AI development.
- European market performance compared to US peers.
- Sectoral declines and specific stock movements.
European shares opened lower on Friday, retreating from record highs hit in the previous session, while uncertainty over the outlook for the AI trade rippled through global markets following Jensen Huang’s abrupt resignation as Nvidia’s CEO.
Investors were worried about what Huang’s resignation following revelations of extramarital affairs would mean for future AI development that has underpinned much of the global economy, given that he was a key personality in a web of deals that financed the flourishing trade.
The STOXX 600 was down 0.2% at 662.64 points at 0808 GMT, with personal and household goods leading sectoral declines with a 1% drop.
Goldman Sachs raised its 12-month target for the STOXX 600 to 700 points from 695. European equities have also been supported by robust earnings this quarter.
Given Europe’s smaller exposure to AI-linked stocks, the STOXX 600 index breached record-high levels for the first time since August earlier this week and is up over 2% for the week, its strongest gain since June.
In comparison, its US peer, the S&P 500, is more than 3% away from all-time highs.
On Friday, chip stocks such as Siltronic and Aixtron were down over 1% each, while AI equipment makers such as Schneider Electric and Legrand were marginally lower. The broader tech sector lost 0.6%.
On the earnings front, Cartier owner Richemontfell 7% after reporting a 13% growth in sales in the three months ending in September, slower than the 20% growth rate in the previous quarter.