European shares down after ECB, BoE rate decision

The pan-European Stoxx 600 dropped 1.07% to 611.53, with Germany’s DAX down 0.63% at 24,448.58, France’s CAC 40 lower by 0.29% at 8,238.17 and the UK’s FTSE 100 sliding 0.9% to 10,309.22

European shares closed lower on Thursday after both the European Central Bank and the Bank of England left interest rates unchanged, while renewed concerns about heavy artificial-intelligence spending by large technology firms weighed on global risk sentiment.

The pan-European Stoxx 600 dropped 1.07% to 611.53, with Germany’s DAX down 0.63% at 24,448.58, France’s CAC 40 lower by 0.29% at 8,238.17 and the UK’s FTSE 100 sliding 0.9% to 10,309.22.

Dan Coatsworth, head of markets at AJ Bell, said “the FTSE 100 dipped on decision day for the Bank of England as ripples from the Anthropic-driven sell-off continue to be felt,” highlighting how pressure on technology and data-related stocks has continued to spill into broader markets.

Sentiment deteriorated overnight after U.S. technology company Alphabet reported strong earnings but said it would sharply increase capital expenditure on AI, flagging spending of $175 billion to $185 billion this year, well above expectations.

The announcement revived investor unease over elevated valuations and the scale of investment required to support AI growth.

Coatsworth said Alphabet’s results showed “much to like,” with revenues and margins improving, but added that what’s left a bitter aftertaste is guidance for a considerable increase in spending, precisely the type of news that investors are finding hard to digest across the tech space.

Patrick Munnelly, market strategy partner at TickMill, said the broader backdrop had already turned fragile, noting that “traders stepped away from megacap tech – long treated as a safe-haven trade thanks to steady earnings – and began leaning toward a wider set of companies tied to improving economic conditions,” a rotation that was undermined by renewed technology selling in Asia and weaker after-hours reactions in US tech stocks.