European shares flat, EssilorLuxottica drops
The pan-European STOXX 600 closed little changed at 578.11
European shares closed flat on Tuesday, while EssilorLuxottica slumped after Google unveiled plans to launch AI-powered glasses.
The pan-European STOXX 600 closed little changed at 578.11. Regional benchmarks were mixed, with Germany’s DAX up 0.5% and France’s CAC-40 down 0.7%.
Ray-Ban maker EssilorLuxottica declined 5.6% – on track for its worst day since April 3 – after Google said it would launch artificial intelligence-enabled glasses in 2026 with Warby Parker.
The news weighed on other luxury stocks, including Kering and LVMH, which shed 2% and 1.4%, respectively. The broader luxury index led sectoral losses with a 1.8% decline.
Insurers were the biggest gainers, up 1.3%, while banks added 0.8%.
Defence stocks jumped after Bloomberg News reported that German lawmakers are set to approve procurement contracts worth a record €52 billion ($60.5 billion) next week. Rheinmetall, RENK and Hensoldt rose between 3.6% and 5.9%, lifting the sector index 0.9%.
In related news, markets remained focused on the U.S. central bank’s two-day policy meeting, which begins on Tuesday. The bank is widely expected to cut rates by 25 basis points on Wednesday, but attention will centre on policymakers’ guidance for the path beyond December.
It’s the biggest risk event of the week. It’s more about the detail, with regard to the dot plots, any changes to the projections, how many dissents, said Daniela Hathorn, senior market analyst at Capital.com.
With such a key event a day from now, it’s common that you see kind of this indecision creeping in and more of a wait-and-see approach, Hathorn added.
But in Europe, investors have begun to price out a rate cut in the coming years after European Central Bank (ECB) policymaker Isabel Schnabel said on Monday that the ECB’s next move could be a hike, signalling a potential divergence between the two central banks.
The hawkish comments sent 10-year euro zone borrowing costs to multi-month highs and German 30-year yields to over 14-year highs on Monday.