European equities retreated on Thursday, with major benchmarks across the region posting losses despite a surge in U.S. chipmaker Nvidia's shares. The Euro Stoxx 50, the region's primary blue-chip index, closed 0.71% lower at 6,424.73 points. Outside the euro area, the FTSE 100 in London fell 0.79% to 10,792.54, while Switzerland's SMI dropped 1.09% to 14,384.37, pressured by declines in defensive heavyweights Novartis and Nestlé. Germany's DAX bucked the trend with a modest gain.
The technology sector was the sole bright spot, with the Stoxx Europe 600 Technology index rising 1.8% as Nvidia's strong outlook and subsequent stock surge lifted peers. Infineon and STMicroelectronics advanced 3.6% and 3.0%, respectively, while software giant SAP gained 5.5% following upbeat earnings outlooks from U.S. peers Salesforce and CrowdStrike.
Defensive sectors lagged, with the food and beverage segment under pressure after Pernod Ricard reported weak guidance. Investment bank Oddo BHF highlighted the company's tepid outlook for fiscal 2027 and a downward revision to its long-term growth targets through 2029, which analysts said would likely reduce earnings expectations. Pernod Ricard's shares fell 4.6%. Swiss fragrance and flavor producer Givaudan also declined 2.9% after Morgan Stanley downgraded its rating from neutral to underweight.
Investor caution ahead of the Federal Reserve's annual Jackson Hole symposium weighed on sentiment. The event, often used to signal key monetary policy shifts, has heightened focus on potential signals regarding interest rates. U.S. Federal Reserve Governor Kevin Warsh is scheduled to deliver remarks on Friday, with markets closely monitoring signals on inflation and policy direction. The personal consumption expenditures price index, the Fed's preferred inflation gauge, rose above the central bank's 2% target the previous day, keeping a September rate hike in play but leaving the decision finely balanced.
