Stoxx 600 closes lower on corporate earnings

The pan-European Stoxx 600 dropped 0.64% to 624.64, with Germany’s DAX down 1.03% at 25,017.98, France’s CAC 40 off 0.36% at 8,398.78 and the FTSE 100 sliding 0.55% to 10,627.04

European stocks closed lower on Thursday as investors digested a new wave of corporate earnings, with geopolitical tensions also keeping sentiment fragile.

The pan-European Stoxx 600 dropped 0.64% to 624.64, with Germany’s DAX down 1.03% at 25,017.98, France’s CAC 40 off 0.36% at 8,398.78 and the FTSE 100 sliding 0.55% to 10,627.04.

In the euro area, construction output rose 0.9% month-on-month in December, while production across the wider EU rose 1.2%, according to Eurostat.

On a yearly basis, construction activity in the single currency bloc dropped 0.9%, while EU output was unchanged.

For 2025 as a whole, output was flat in the euro area and up 0.5% across the EU compared with 2024.

Within the eurozone, civil engineering added 2.3% on the month, building construction advanced 0.9% and specialised activities rose 0.6%.

However, building construction was down 3.3% year-on-year, while civil engineering grew 1.6% and specialised activities edged 0.2% higher.

Hopes of a market rally have been dashed while potential military action dominates the headlines, said Chris Beauchamp, chief market analyst at IG, adding that in a quieter period for markets today news, or lack of it, around Iran is the driver for the day.

Each time president Trump sounds more conciliatory the market rallies, while hints of action cause it to weaken, he said.

He also noted that hawkish Fed minutes last night have cast their own shadow over the day, as they remind investors that simply placing Kevin Warsh in charge of the Fed is unlikely to lead to Trump getting his own way very quickly, and sets us up for more Fed drama even after Powell steps down.