Europe stocks slip as debt ceiling talks continue; Germany enters recession; ASML soars after Nvidia results (2023)

European markets ended lower Thursday as negative sentiment on the back of ongoing U.S. debt ceiling negotiations continued to weigh.

After a choppy day, the benchmark Stoxx 600 finished around 0.24% lower. Tech stocks bucked the trend to end 1.8% higher following Nvidia's blockbuster results, which gave related stocks a boost. Dutch chip machine maker ASML ended the day almost 5% higher.

Other sectors slipped, however, while oil and gas stocks fell around 2%.

European markets

U.S. markets were also buoyed by Nvidia's numbers, with the 0.48% higher and Nasdaqup 1.4% by 4:40 p.m. London time. This despite Fitch Ratings placing the United States' AAA rating on a negative rating watch, saying the debt ceilingnegotiations have raised the risks that the government could miss payments on some of its obligations.

Elsewhere, data from the German statistics office on Thursday showed a downward revision to gross domestic product from zero to -0.3% for the first three months of the year, placing Europe's biggest economy in a technical recession. The DAX index was 0.25% lower.

In Asia-Pacific, markets were largely lower with Hong Kong'sHang Seng indexfalling about 2% to close at 18,746.92 — the lowest level this year.

Europe markets end lower

European markets ended the day in the red Thursday, with the pan-regional Stoxx 600 finishing around 0.24% lower.

On a country basis, the U.K's FTSE 100 was 0.62% down and Spain's Ibex 35 was 0.43% lower. France's Cac 40, Germany's Dax and Italy FTSE Mib were all down around 0.25%.

Katrina Bishop

Semiconductor ETFs hit new 52-week highs

Multiple semiconductor ETFs reached new 52-week highs Thursday morning, led by Nvidia shares rallying more than 24% following its earnings and current quarter forecast announcement.

The VanEck Semiconductor ETF was up 6.5% Thursday, on pace for its strongest day of the year back to Nov. 10, 2022. The iShares Semiconductor ETF was up 4.4%.

The broader Technology Select Sector SPDR (XLK) Fund also gained 2.3% and reached a new 52-week high.

Europe stocks slip as debt ceiling talks continue; Germany enters recession; ASML soars after Nvidia results (1)

VanEck Semiconductor ETF and Technology Select Sector SPDR Fund (XLK

— Hakyung Kim, Gina Francolla

Chip firms boosted by Nvidia results

Dutch firmASMLand Taiwan'sTSMC, two of the world's most important semiconductor firms, got a share price boost on Thursday afterNvidia'searnings impressed investors.

Nvidia reported earnings and revenue that beat market expectations on Wednesday. But its sales forecastof about $11 billion for the second quarter— more than 50% higher than Wall Street estimates — was what sent the U.S. giant's stock surging more than 24% in after-hours trade.

Europe stocks slip as debt ceiling talks continue; Germany enters recession; ASML soars after Nvidia results (2)

ASML share price.

Read more here.

— Arjun Kharpal

We want to increase our shareholder payouts, says Mediobanca CEO

Europe stocks slip as debt ceiling talks continue; Germany enters recession; ASML soars after Nvidia results (3)

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We want to increase our shareholder payouts, says Mediobanca CEO

Squawk Box Europe

Alberto Nagel, CEO of Mediobanca, discusses the Italian investment bank's three-year strategy and the risks the business faces.

Potential U.S. rating downgrade comes as ‘no surprise,’ economist says

Europe stocks slip as debt ceiling talks continue; Germany enters recession; ASML soars after Nvidia results (4)

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Potential U.S. rating downgrade comes as 'no surprise,' economist says

Street Signs Europe

Carl Weinberg, chief economist at High Frequency Economics, discusses U.S. debt ceiling talks and Fitch's decision to put the United States' AAA long-term foreign-currency issuer default rating on negative watch.

UK net migration hits record high of 606,000

UK Home Secretary Suella Braverman attends the weekly government cabinet meeting at 10 Downing Street on May 23, 2023 in London, England.

Leon Neal | Getty Images News | Getty Images

Net migration to the U.K. totaled a record high of 606,000 in 2022,new figures showed.

It comes despite repeated pledges by the ruling Conservative party to reduce the number, and with party members divided on the need to increase migration to fill labor shortages.

The government this week said it would tighten rules on student visas, reducing the number of students allowed to bring dependents to the U.K. and restricting the switching of student visas to working visas.

Read the full story here.

— Jenni Reid

UK borrowing rates close in on last year’s ‘mini-budget’ crisis levels

U.K. borrowing costs are nearing levels not seen since thebond market crisistriggered by former Prime Minister Liz Truss' 2022 mini-budget.

U.K. consumer price inflation rate fell by less than expected in April, figures showed Wednesday. The annual consumer price index dropped from 10.1% in March to 8.7% in April, well above consensus estimates and theBank of England's forecast of 8.4%.

This fueled hawkish market bets on Bank of England rate rises.

U.K. government bond yields continued to rise early on Thursday. The yield onU.K. 2-year giltclimbed to 4.42% and the10-yearyield rose to almost 4.28%.

Read the full story here.

Europe stocks slip as debt ceiling talks continue; Germany enters recession; ASML soars after Nvidia results (5)

2-year gilt yield.

— Elliot Smith

Europe stocks slip

European stocks extended the previous session's sharp losses early Thursday, with the Stoxx 600 index 0.13% lower.

Sectors were mixed, with technology 1.65% higher but few other gains. Media and retail stocks led losses, both down around 1.2%.

Germany's DAX fell 0.4% after statistics showed the country entered a technical recession in the first quarter. The U.K.'s FTSE 100 and France's CAC 40 lost 0.5% and 0.6%, respectively.

Europe stocks slip as debt ceiling talks continue; Germany enters recession; ASML soars after Nvidia results (6)

Stoxx 600 index.

— Jenni Reid

German economy enters recession

Before sunrise, the residential buildings and office towers of the banking metropolis in Frankfurt are reflected in the quietly flowing Main River.

Picture Alliance | Picture Alliance | Getty Images

The German economy entered a technical recession in the first quarter of this year, as households tightened spending.

Data from the German statistics office showed a downward revision to GDP from zero to -0.3% for the period, after Europe's biggest economy recorded a 0.5% contraction in the last quarter of 2022.

Read the full story here.

— Silvia Amaro

UK household energy bills to fall for first time since crisis

Britain's energy regulator Ofgem announced household gas and electricity bills will be capped at £2,074 ($2,562) annually for the three months from July 1, owing to lower wholesale prices.

The cap was previously £3,280, though the government intervened to make the average household pay no more than £2,500.

It represents the first time since the energy crisis began in late 2021 that consumer prices will fall, though they remain nearly double their average October 2021 levels. The regulator last year shortened its cap revision period from six to three months in light of market volatility.

On Wednesday U.K. inflation figures showed a moderation in price rises. However, headline and core figures were above expectations and inflation in areas such as food remains near record levels, keeping pressure on the Bank of England to continue hiking interest rates.

— Jenni Reid

CNBC Pro: Morgan Stanley names 2 chip stocks with 'significant upside' as China bans Micron

Morgan Stanley identified two memory chip stocks with significant potential for growth as China bans chips made by Micron, a major U.S.-based memory chipmaker.

The bank predicts an upturn in the memory chip market, and adds that the influence of artificial intelligence on memory chips has been underestimated.

CNBC Pro subscribers can read more here.

— Ganesh Rao

CNBC Pro: These 4 stocks could double in price — including one tech giant, says financial research firm

Some corners of the market may have been overbought this year, but there are still long-term opportunities for investors, according to financial research firm Redburn.

"Which stocks have the capacity to double over two to three years? Redburn analysts have chosen 12 companies where changes in the competitive or financial environment or management action could realise outsize value for shareholders," the firm wrote in a May 23 report.

Here are four of them.

CNBC Pro subscribers can read more here.

— Weizhen Tan

European markets: Here are the opening calls

European markets are expected to open higher Thursday.

The U.K.'s FTSE 100 index is expected to open 14 points higher at 7,626, Germany's DAX 13 points higher at 15,837, France's CAC up 4 points at 7,253 and Italy's FTSE MIB 17 points higher at 26,579, according to data from IG.

Earnings come from Tate & Lyle, Manchester Utd, Johnson Matthey, United Utilities and Pets at Home. Data releases include a detailed breakdown of Germany's first-quarter gross domestic product.

— Holly Ellyatt

Fed officials are uncertain on whether more rate hikes are needed, minutes show

The Fed minutes showed "uncertainty" from participants about whether to increase rates for an 11th time at its June meeting.

There appeared to be two camps in the Fed now, according to the minutes. One group that contained "some" members judged that progress in reducing inflation was "unacceptably slow" and would necessitate further hikes. The other, backed by "several" FOMC members, saw slowing economic growth in which "further policy firming after this meeting may not be necessary."

The minutes do not identify individual members nor do they quantify "some" or "several" with specific numbers. However, in Fed parlance, "some" is thought to be more than "several."

Bottom line, the minutes showed the Fed would be closely watching the incoming data to decide whether to hike rates again on June 14.

— Jeff Cox, John Melloy

Correction: In Fed parlance, "some" is thought to be more than "several." An earlier version misstated the difference.

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