Europe's Stoxx 600 closed at a record high on Tuesday, up 0.7% to 656.86 points and 10% higher for 2026 so far. Semiconductor makers and banks lead the index's winners, while luxury goods and automakers remain its biggest laggards.
The Stoxx 600 touched a record high on Tuesday, closing 0.7% higher at 656.86 points. Europe's headline index tracks 600 large, medium, and small-cap companies across 17 countries and is often compared to the S&P 500. It is up 10% in 2026 so far, lagging its North American counterpart.
Since the U.S. and Israel attacked Iran in late February, European markets have had to contend with higher oil prices and sticky inflation, even as the buildout of AI infrastructure has continued with more volatility in recent weeks.
Semiconductors and banks lead the gains
Technology shares have performed strongly in 2026, despite a recent pullback in semiconductor share prices. The Stoxx 600's five best performers this year are all semiconductor names, led by Soitec's 371% gain, followed by AT&S at 330%, Technoprobe at 123%, Aixtron at 116% and ST Microelectronics at 101%.
Recently, though, that trade has come under pressure: AT&S and Aixtron have each fallen more than 20% from their mid-June peaks. Morningstar strategist Michael Field pointed to capital already committed to chip capacity: "the cash is committed to capex and semiconductor firms are seeing the benefit".
Banking is another strong performer. The Euro Stoxx Banks index has returned 18%, with particularly strong gains among French and Italian lenders fueled by a wave of takeover activity. AJ Bell highlighted Mediobanca, BNP Paribas and ABN Amro as examples of winners so far this year.
Energy stocks gain on higher oil prices
Oil and gas stocks have been the main energy beneficiaries since the war broke out in February. Britain's BP reported a sharp upswing in second-quarter profit on Tuesday as energy majors benefit from higher fossil-fuel prices amid the U.S.-Iran hostilities. Its shares are up 20% year-to-date.
Luxury and autos remain laggards
China, which has become responsible for around one-third of global luxury demand over the last decade, and the broader Asian market have seen a significant slowdown in luxury sales this year. LVMH, Hermes and Kering are down 24.43%, 26.05% and 8.31% respectively since the start of the year, though jewelry has been a bright spot.
European automakers remain stuck in a prolonged structural downturn, and 2026 has brought little relief. Slowing electric-vehicle demand, lost market share to Chinese rivals, and higher borrowing costs have weighed on the sector for five years, as sales volumes stay well below pre-pandemic levels. The Stoxx Autos index is down 16% year-to-date. Porsche AG and Stellantis are down 27.6% and 48.7% respectively, among the index's worst performers.
Source: CNBC
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