European shares flat as defence gains combat tech losses By Reuters
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 25 2025
0mins
Should l Buy ASML?
Source: Investing.com
European Market Overview: European shares remained flat, with the STOXX 600 index slightly up by 0.07%, as gains in defence stocks offset declines in technology stocks due to concerns over a U.S.-China technology war and new semiconductor restrictions.
Stock Movements: Defence stocks surged following discussions on increased German military spending, while technology stocks like STMicroelectronics and ASML fell; Unilever's shares dropped after CEO resignation news, whereas Thyssenkrupp rose ahead of a shareholder meeting related to its warship division spin-off.
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Analyst Views on ASML
Wall Street analysts forecast ASML stock price to rise
12 Analyst Rating
12 Buy
0 Hold
0 Sell
Strong Buy
Current: 1351.580
Low
1385
Averages
1583
High
1911
Current: 1351.580
Low
1385
Averages
1583
High
1911
About ASML
ASML Holding N.V. is a holding company based in the Netherlands. The Company operates through its subsidiaries in the Netherlands, the United States, Italy, France, Germany, the United Kingdom, Ireland, Belgium, South Korea, Taiwan, Singapore, China, Hong Kong, Japan, Malaysia and Israel. The Company operates through one business segment which is engage in development, production, marketing, sales, upgrading and servicing of advanced semiconductor equipment systems, consisting of lithography, metrology and inspection systems. The Company offers TWINSCAN systems, equipped with lithography system with a mercury lamp as light source (i-line), Krypton Fluoride (KrF) and Argon Fluoride (ArF) light sources for processing wafers for manufacturing environments for which imaging at a small resolution is required. TWINSCAN systems also include immersion lithography systems (TWINSCAN immersion systems).
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Attractiveness of International Stocks: Currently, nearly all major international stock indices are trading at significant discounts compared to their U.S. counterparts; for instance, the MSCI EAFE index has a price-to-earnings ratio of just over 15 times and a dividend yield of 3.4%, compared to 1.5% for the S&P 500.
- ETF Investment Advantages: The Schwab International Equity ETF (SCHF), with an expense ratio as low as 0.03%, tracks mid- and large-cap stocks from developed countries, holding approximately 1,500 stocks with the largest accounting for only 1.64%, providing investors with excellent diversification opportunities.
- Risk and Reward: While investing in international stocks carries currency and geopolitical risks, the risk-reward dynamics of the Schwab International Equity ETF appear particularly attractive in the current high-valuation market, especially considering the relative undervaluation of international stocks.
See More
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- Valuation Comparison: International stocks are currently trading at significantly lower valuations compared to the U.S. market, with the MSCI EAFE index at just over 15 times earnings, while the S&P 500 averages nearly 23 times, making it challenging for investors to find attractive opportunities.
- ETF Investment Opportunity: The Schwab International Equity ETF (SCHF) offers a diversified investment in nearly 1,500 stocks at an extremely low expense ratio of 0.03%, with a dividend yield exceeding 3.2%, making it an appealing choice for income-focused investors.
- Market Performance Shift: After underperforming for nearly a decade, international stocks outperformed the S&P 500 by over 10 percentage points in 2025 and continue to show strong performance in 2026, indicating a potential recovery in the international market.
- Risk and Reward Dynamics: While investing in international stocks carries currency and geopolitical risks, the risk-reward dynamics of the Schwab International Equity ETF appear particularly attractive in the current expensive market, making it suitable for value-seeking investors.
See More
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Underlying Factors: The drop is attributed to factors related to oil prices and interest rates, rather than Nvidia, AI, or hyperscaler spending.
See More
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- Bank Stocks Under Pressure: Morgan Stanley and Cliffwater LLC capped withdrawals from their private credit funds amid investor redemption demands exceeding fund limits, causing both Morgan Stanley and KKR to decline over 4%, reflecting growing concerns about credit quality in the market.
- Mixed Economic Data: Initial jobless claims in the US fell by 1,000 to 213,000, indicating labor market strength, while January housing starts unexpectedly rose 7.2% to 1.487 million, despite building permits dropping 5.4% to 1.376 million, suggesting potential slowdowns in future construction activity.
- Optimistic Earnings Outlook: Despite market volatility, over 95% of S&P 500 companies have reported earnings, with 74% exceeding expectations, and Q4 earnings growth is projected at 8.4%, providing some support to the market, although overall sentiment remains pressured by rising oil prices.
See More
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- Surge in Oil Prices: Following an attack by Iran on two tankers, Iraq has suspended oil terminal activities, causing WTI crude prices to rise over 8% today, which could exacerbate global economic uncertainty and lead to increased inflation, impacting consumer spending.
- Global Supply Constraints: The IEA reported that the conflict with Iran is disrupting 7.5% of global oil supply, with an expected reduction of 8 million barrels per day this month, indicating a significant impact on global markets and forcing producers to cut output.
- Mixed US Economic Data: While initial jobless claims fell to 213,000, indicating labor market strength, building permits unexpectedly dropped to a five-month low, suggesting a potential slowdown in future construction activity, which could affect economic growth expectations.
- Market Reactions: Airline and chip stocks are broadly down due to rising oil prices, with companies like Carnival, Royal Caribbean, and Lam Research seeing declines of over 3%, reflecting market concerns about the impact of high oil prices on corporate earnings.
See More
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- Crude Oil Reserves Release: Reports indicate a government plan for a record release of crude oil reserves, which is expected to alleviate market supply constraints and could lead to a short-term drop in oil prices, positively impacting related industries.
- Futures Market Reaction: Following this news, futures prices rose, with market participants becoming more optimistic about future oil price trends, potentially stimulating investor interest in energy-related assets.
- Oracle Earnings Surge: Oracle's stock jumped significantly after its earnings report, reflecting strong performance in cloud computing and software services, further solidifying its leadership position in the tech industry.
- Improved Market Sentiment: Overall market sentiment has been boosted by the crude reserves release and Oracle's strong performance, enhancing investor confidence and potentially driving more capital into the stock market, aiding economic recovery.
See More
