Shares fall on disappointing tech earnings

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European shares and Wall Street futures declined on Thursday after disappointing technical results, while investors prepared for meetings of major central banks next week.

Europe’s region-wide Stoxx 600 declined 0.2 percent, led by losses in technology stocks, while France’s CAC 40 shed 0.1 percent and Germany’s DAX lost 0.2 percent.

The move echoed US futures markets, where contracts tracking the benchmark S&P 500 fell 0.2 percent, while those tracking the tech-focused Nasdaq 100 retreated 0.7 percent ahead of the New York open.

Investor sentiment soured after the first tech giant failed to impress with its second-quarter results. A series of price cuts dented Tesla’s profit margin on the carmaker’s earnings, while Netflix missed sales estimates and posted lower-than-expected guidance for the next quarter.

Big tech companies drove most of the rally on Wall Street since the start of the year as investors rode the wave of artificial intelligence hype and hoped global interest rate hikes would soon end.

Meanwhile, traders turned their attention again to economic data, including weekly US jobless claims and eurozone consumer confidence indicators due later in the day, ahead of a series of central bank policy meetings next week.

The market largely expects the European Central Bank to raise its benchmark deposit rate by 0.25 percentage points to 3.75 percent next Thursday, but remains divided on whether rates will move beyond that point after dovish comments from policy makers earlier this week.

The US Federal Reserve is expected to raise the federal funds rate by a similar amount from its current target range of 5 percent to 5.25 percent. But lower-than-expected inflation data last week showed that the Fed’s tightening campaign may also be nearing its end.

“Central banks may finally be nearing the end of their current rate hike cycle, especially after some positive data on inflation in recent days,” said Henry Allen, macro strategist at Deutsche Bank.

The trend spread to the UK last session, when official data showed inflation eased more than expected in June, prompting speculation that Bank of England policymakers would opt for a smaller rate hike at their August meeting.

London’s FTSE 100 index was the only gainer in Europe on Thursday, rising 0.2 per cent at market open.

Equities in Asia were lower, with China’s benchmark CSI 300 index slipping 0.7 percent while Hong Kong’s Hang Seng fell 0.1 percent.