European stock markets jump to record peak as tech jitters abate

European shares climbed to a record high on Tuesday with retail and utilities stocks leading the broader gains, as selling pressures ebbed a day after the Chinese AI startup DeepSeek triggered a global market rout.

Gold prices held steady on Tuesday, anchored by stability in European equities and US stock futures, a day after bullion’s sharp decline amid a tech-led sell-off.

The pan-European STOXX 600 was up 0.7% as of 1020 GMT, narrowly beating an intraday all-time high hit on Jan. 24.

Retail stocks jumped 2.1%. Shares of retailers JD Sports, Kingfisher and Howden Joiner were trading above 3% each.

Utilities was also amongst the top winning sectors, adding 1.9%, while media rose 1.4%.

European technology index, which took a hit in the previous session, was trading 0.6% higher. Engineering and technology consulting group Alten rose 10% after reporting annual results.

DeepSeek’s discount artificial intelligence model and its soaring popularity rattled investors on Monday, who dumped technology shares and questioned the sky-high valuation of AI bellwethers.

AI darling Nvidia’s market value declined by $593 billion, a record single-day loss for any company.

“Valuations on some of these tech companies have got too high, too fast and the growth that had been delivered couldn’t continue to be achieved,” said Danni Hewson, head of financial analysis at AJ Bell.

“I think it’s a bit of a time for a reset. But I don’t think it’s necessarily Armageddon.” Sartorius jumped 12.5% to May highs after the German pharmaceutical equipment supplier reported better-than-expected fourth-quarter earnings as well as strong bioprocess solutions orders.

Siemens Energy rose 3% after the offshore wind turbine maker reported a preliminary first-quarter revenue above market expectations.

The company, which provides electric hardware for AI infrastructure, slumped 20% on Monday.

Adding to market relief, French consumer confidence rose in January to 92 points from 89 points in December.

Spain’s unemployment rate in the fourth quarter fell to its lowest in more than 16 years, as the economy outperforms its neighbours.

Investors await interest rate verdicts from the US Federal Reserve and European Central Bank later in the week.

With a quarter-point rate cut already priced in for the ECB, all eyes will be on policymakers’ remarks to set the tone for the easing cycle for 2025.

European bank earnings on Thursday will also be a key event for the markets as investors worry that US President Donald Trump’s administration will slash red tape for US banks, potentially disadvantaging European institutions.

Netcompany Group slumped 15.7% after the IT consultancy firm posted fourth-quarter revenue below market expectations. Futures tied to the S&P 500 and the Nasdaq were higher on Tuesday after steep losses in the previous session, when the popularity of a low-cost Chinese artificial intelligence model rattled stocks of US companies invested in the technology.

Monday’s selloff came after Chinese startup DeepSeek launched AI models it says are on a par or better than industry-leading models in the United States at a fraction of the cost.

“The narrative on Monday was that the eye-watering sums spent on AI capex by mega-cap tech companies could be somewhat obsolete if a cheaper solution exists,” analysts at BCA Research said in a note.

AI chip leader Nvidia rose 4.8% in premarket trading, a day after $593 billion was wiped off its market value in the biggest single-session loss for any company. Other AI-linked stocks also regained some ground, with Oracle and Broadcom rising 3.5% and 4%, respectively.

Power companies, which are expected to see a surge in demand from energy-intensive data centers needed to develop AI technology, were broadly higher after tumbling a day earlier. Vistra and GE Vernova added 4.6% and 3%.

The tech-heavy Nasdaq dropped more than 3% on Monday, its worst single-day showing in more than a month, while the benchmark S&P 500 fell close to 1.5%.

At 04:51 a.m. ET on Tuesday, Dow E-minis were up 25 points, or 0.06%, S&P 500 E-minis were up 19.5 points, or 0.32%, and Nasdaq 100 E-minis were up 125.75 points, or 0.59%. Company earnings are likely to take centre stage this week.

Boeing, General Motors and Lockheed Martin are among the companies due to report quarterly results later in the day, while “Magnificent 7” members Microsoft , Facebook-parent Meta, Apple and Tesla are slated for later this week.

Also in focus, the Federal Reserve is widely expected to hold its lending rate steady in its first interest-rate decision of the year on Wednesday, while the December reading of personal consumption expenditures (PCE) is scheduled for Friday.

Agencies