European Markets Stall as BMW Warnings Weigh on Auto Sector

The pan-European STOXX 600 index hovered at 635.87 points by mid-morning, struggling to find direction as weakness in the automotive industry offset gains elsewhere. BMW’s decision to slash its annual profit forecast served as a stark reminder of the structural challenges facing carmakers, with Citigroup equity strategist Beata Manthey noting that the sector remains fundamentally pressured. A recent survey of German automotive suppliers further underscored this gloom, revealing that pessimists now outnumber those expecting growth.

Contrasting the automotive decline, technology stocks provided a necessary floor for the broader market, with Aixtron rising 4.6% and ASML adding 1%. Defence shares also saw a modest 1% lift. Meanwhile, Barclays signaled a shift in sentiment by closing its underweight position on European equities and raising its STOXX 600 target to 670 points. Individual bright spots included dental implant manufacturer Straumann, which surged 9% following an aggressive upgrade to its 2026 profit guidance, and Auto1, which climbed 8.6% after updating long-term projections. Markets now look toward Washington for the Federal Reserve’s latest interest rate decision and signals on future monetary policy.