Europe Markets Weekly — 2026-07-28

Market Snapshot

• STOXX 600: +0.46% weekly gain in local currency terms
• DAX: +1.36% for the week
• FTSE 100: +0.91% for the week
• CAC 40: +0.88% for the week

Key Drivers

• Strong Q2 earnings lift sentiment despite macro concerns: STOXX 600 companies are expected to report earnings growth of 17.3% in the second quarter, with 93 companies set to report this week. Upbeat results from companies including Unilever and Safran have provided support, though semiconductor sector weakness continues to weigh.

• ECB holds rates steady at 2.25%, signals data-dependent approach: The European Central Bank maintained its deposit facility rate unchanged on July 23, with President Lagarde emphasizing a meeting-by-meeting, data-dependent policy stance. Eurozone inflation eased to 2.8% in June, marking the first decline this year.

• Oil price volatility eases but remains elevated: European natural gas prices plunged 8% as U.S.-Iran tensions de-escalated over the weekend, lifting risk sentiment. However, geopolitical uncertainty continues to support crude prices and cap market upside, with WTI sliding 8.73% to $124.76 on profit-taking.

Earnings & Corporate

• SAP lifts European tech sector: The software giant's positive results helped offset a global semiconductor selloff and supported the broader technology index, with the STOXX 600 posting weekly gains despite prior concerns about AI valuation excess.

• LVMH boosts luxury stocks: Luxury sector strength emerged this week as LVMH results supported consumer discretionary shares, with investors rotating into companies delivering tangible earnings beats amid economic uncertainty.

Geopolitics & Energy

• EU sanctions impasse continues despite Thursday's compromise: The European Union reached a watered-down 21st sanctions package against Russia on July 23, but member states remained divided over energy provisions. Greece secured exemptions on Russian LNG shipping, while disagreements over the crude oil price cap persisted, exposing the limits of unified EU energy sanctions policy.

• Europe's North African gas strategy faces concentration risk: New analysis reveals Europe's natural gas diversification efforts depend heavily on just two North African suppliers, leaving the continent vulnerable to supply disruptions or political instability in Algeria and Morocco—critical as winter storage levels remain below historical averages.

What to Watch Next Week

• Federal Reserve meeting outcome and guidance — U.S. monetary policy decisions will influence euro strength and European equity valuations
• Eurozone GDP and flash CPI data — Economic growth and inflation readings will test ECB's data-dependent rate-hold narrative
• Remaining STOXX 600 Q2 earnings reports — Final wave of corporate results before markets enter summer lull
• Middle East geopolitical developments — Escalation risks could reignite oil volatility and derail energy-driven market gains