STOXX 600 opens higher ahead of key Eurozone inflation data

European shares opened higher on Tuesday, supported by strong gains in technology stocks after chipmaker STMicroelectronics raised its revenue targets for its data centre business.

Investors also remained focused on a key eurozone inflation report due later in the day, which could provide further clues about the impact of the Middle East conflict on the regional economy.

The pan-European STOXX 600 index rose 0.7% to 625.20 points by 0715 GMT.

Technology stocks led sectoral gains, advancing 2.4% and helping drive broader market strength.

STMicroelectronics leads technology rally

STMicroelectronics emerged as one of the strongest performers in European markets after increasing its revenue targets for its data centre business.

The company’s updated outlook signalled continued strong demand linked to the ongoing artificial intelligence boom.

Shares of the chipmaker surged 9.8% to 65.1 euros, marking their highest level since September 2000.

The positive momentum extended across the technology sector.

Other companies viewed as beneficiaries of growing AI-related demand also posted gains.

Infineon rose 5.2%, while Schneider Electric added 2.4%.

The rally in technology shares provided significant support to broader European markets and contributed to the STOXX 600’s advance during early trading.

Geopolitical developments support risk sentiment

Investor sentiment also received support from developments in the Middle East.

Lebanon announced a partial ceasefire between Hezbollah and Israel on Monday following a brief escalation in hostilities.

The announcement helped improve risk appetite among investors and reduced some concerns about further regional instability.

The easing of geopolitical tensions contributed to a more positive tone across equity markets.

Oil prices ease but remain elevated

Crude oil prices fell around 1% as investors responded to comments from US President Donald Trump indicating that discussions with Iran were ongoing.

The decline in oil prices also followed a report stating that Tehran had engaged in indirect negotiations with Washington.

Despite the pullback, analysts noted that energy prices remain elevated.

At approximately $94 per barrel, crude prices continue to pose challenges for consumers and businesses.

Market participants are closely monitoring energy costs due to their potential impact on inflation and economic activity across Europe.

Focus turns to Eurozone inflation report

Attention later in the day was expected to shift to the release of euro zone consumer inflation data.

The report is anticipated to show that consumer prices increased by 3.2% in May on an annual basis compared with the previous month’s reading.

The inflation figures are expected to play an important role in shaping expectations for monetary policy in the region.

According to data compiled by LSEG, traders currently expect the European Central Bank to raise interest rates by 25 basis points at its meeting next week.

The inflation report could either reinforce or challenge those expectations depending on the outcome.

Abivax shares tumble on trial results

Among individual stocks, French drugmaker Abivax was among the weakest performers of the session.

The company’s shares fell 27% after it published late-stage trial results for its inflammatory bowel disease treatment.

The sharp decline contrasted with gains seen across much of the technology sector and highlighted the stock-specific risks facing pharmaceutical companies following clinical trial updates.

Overall, European markets began the day on a positive note, with strong technology sector performance offsetting concerns over elevated energy prices.

Investors remained focused on incoming inflation data and the outlook for European Central Bank policy as they assessed the broader economic environment.