European Markets Flat Amidst Middle East Tensions and Bond Yield Hike
European markets remained flat on Wednesday as concerns over Middle East tensions kept investors cautious. Despite gains in basic resources stocks, which rose by 0.6% tracking higher gold prices, technology shares faltered ahead of the release of minutes from the U.S. Federal Reserve's July meeting.
The pan-European STOXX 600 index was steady at 652.07 as of 0715 GMT, while basic resources stocks gained on higher gold prices. However, technology stocks were under pressure due to higher bond yields, which can weigh on growth-oriented companies by increasing the discount rate applied to future earnings.
Semiconductor stocks also came under scrutiny after reports that Anthropic's annual revenue run-rate reached $65 billion at the end of July failed to meet some investors' expectations. Soitec led sector losses with a 4.4% decline, while Nordic Semiconductor and Scout24 fell between 2.1% and 2.3%.
U.S. President Donald Trump's statement that no talks were taking place with Iran and the Strait of Hormuz remaining open kept geopolitical uncertainty high on investors' radar. Any disruption to traffic through this strategically important waterway could have significant implications for global energy markets, as it is critical for oil shipments.