The pan-European STOXX 600 reached an all-time high of 617 on Wednesday before pulling back modestly over two sessions. The Euro STOXX 50 fell 0.4% to 5,987 on Friday as heavyweight bank stocks — including UniCredit, Deutsche Bank, and BBVA — dropped between 3.5% and 4%.
Rising anxiety about AI-driven disruption weighed on related sectors including logistics, commercial real estate, and financial services. On the corporate front, L'Oréal tumbled more than 5% on disappointing Q4 sales growth, while Safran surged 8.3% after raising its 2026 revenue and earnings forecasts. Defence stocks continued their rally for a fifth consecutive session.
Eurozone employment grew 0.3% quarter-on-quarter, maintaining steady if slow job growth and supporting the ECB's stance of holding rates at 2.0%. The euro hovered near .187. Morningstar notes that European equities now trade at just a 1% discount to fair value — the thinnest margin of safety in over two years.