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European stock markets opened lower on Monday, led by declines in technology and healthcare stocks, as stronger-than-expected U.S. labor market data dampened hopes for significant Federal Reserve rate cuts this year.
The pan-European STOXX 600 index dropped 0.5% by 0812 GMT, extending losses from Friday when it fell nearly 1% after data revealed that U.S. job growth accelerated unexpectedly in December. The unemployment rate declined to 4.1%, signaling a robust labor market that could prompt the Federal Reserve to maintain a cautious approach to monetary easing.
Sector Performance
Technology stocks bore the brunt of the downturn, falling 1.6% in a move mirroring losses in U.S. tech-heavy indices. Meanwhile, healthcare stocks also weighed on the index with a 0.9% decline.
In contrast, energy stocks provided some support, climbing 0.9% as crude oil prices advanced more than 1% amid expectations of tighter global supply.
European government bond yields remained elevated, reflecting similar trends in U.S. Treasuries. Germany’s benchmark 10-year bund yield hovered near its highest level in over six months, underscoring persistent inflationary pressures and cautious sentiment in bond markets.
Key Data in Focus
Market participants are now turning their attention to upcoming inflation reports from major European economies, including Germany and the UK, as well as the U.S. consumer price index (CPI) data due later this week. These releases are expected to provide further insights into the trajectory of monetary policy on both sides of the Atlantic.
Corporate Highlights
In corporate news, British gambling giant Entain surged 8.8% after announcing that it expects its 2024 core profit to reach the top end of its forecast range. This optimistic outlook helped offset broader market losses, with the company emerging as one of the standout performers on the STOXX 600.
As global equities remain under pressure, the focus on macroeconomic data and central bank policy decisions will continue to drive market sentiment in the days ahead. With rate-cut expectations diminishing, volatility may persist across key sectors, particularly in technology and growth-oriented stocks.
