European Stocks Fall on Rates-Decision Day; Rheinmetall Drops

(Bloomberg) -- European stocks fell as investors tackled a busy slate of results and monitored key interest-rate decisions in the region. Rheinmetall slumped after a disappointing analyst call.

The Stoxx Europe 600 Index fell 0.6% by 12:28 p.m. in London. Rallying technology shares performed best, while auto stocks and real estate were the biggest laggards. Miners also fell after a sharp drop in silver prices.

Rheinmetall AG slumped 7.4% after its call with analysts led to expectations of downgrades to consensus estimates. A.P. Moller-Maersk A/S dropped 6.2% after the Danish container giant said it will focus on costs as it faces deteriorating freight rates from the re-opening of the Red Sea. Vestas Wind Systems A/S shares fell 6.6% on a softer-than-expected services revenue forecast. BBVA SA dropped the most in 10 months after the Spanish lender reported higher provisions in key markets such as Turkey and Mexico. 

Fresnillo Plc slumped 4.4% to lead the decline in basic resources stocks. Meanwhile, the drop in silver prices was a boost for Pandora A/S as its shares jumped 4.8%, offsetting news that it would pause buybacks after forecasting slowing sales this year. 

In a big day for monetary policy, the Bank of England held rates, but came within a vote of cutting after its updated forecasts showed inflation falling below its target, slower growth and rising unemployment rising. The exporter-heavy FTSE 100 briefly erased gains after the decision as the pound weakened against the dollar amid increased bets of easing at the next BOE meeting. 

The European Central Bank is also expected to hold rates steady later as a robust regional economy has so far defied global tensions and a strong euro.

The Stoxx 600 has touched record highs this week on the prospect of resilient economic growth, with the benchmark hovering just below overbought territory. Meanwhile, a selloff in software stocks has rattled investors concerned about the impact of AI disruption, sparked by Anthropic PBC’s Claude Cowork tool. That’s playing out during a mixed earnings season, and as investors digest the nomination of a new Federal Reserve chair. 

“Europe has been unloved for so long with the exception of 2025, but I don’t think that even the ‘Claude selloff’ will drive a more meaningful rotation considering the Fed appointment turned out better than expected and tariff fears are nearly out of the way,” said Andrea Gabellone, head of global equities at KBC Securities.

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--With assistance from Michael Msika.

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