European Markets Tumble Amid U.S. and China Slowdown Concerns

Europe's main share indices hit a two-week low, led by a decline in technology stocks. Concerns over a U.S. economic slowdown and China's weak manufacturing data are affecting global markets. The STOXX 600 index fell 1%, while specific companies like ASML Holding and Volvo Cars saw significant declines.

Europe's main share indices fell to a two-week low on Wednesday, with technology stocks leading the declines as concerns mount over an imminent slowdown in the United States and weakness in the Chinese economy, rattling global markets. The pan-European STOXX 600 index fell by 1%, with all major regional markets showing declines between 0.5% and 1%. The STOXX volatility index climbed to its highest point since August 9.

Technology stocks in Europe spearheaded the decline, with the sector dropping over 3% to nearly a one-month low. This trend is in line with a selloff in Wall Street technology stocks, prompted by a series of weaker-than-expected economic data. Meanwhile, China's manufacturing activity fell to a six-month low in August, which adversely affected luxury stocks in Europe such as LVMH Holdings, Richemont, and Christian Dior, falling between 3% and 5.8%.

The ongoing worries about slowing growth in the U.S. and China, the world's two largest economies, have been pressuring European markets over the past month. While France's services sector benefited from hosting the Olympic Games in August, Germany's services sector growth slowed for the third straight month, indicating that Europe's largest economy is losing steam. Despite these challenges, European equities are still 8.5% higher for the year, thanks to the prospect of lower borrowing costs keeping markets propped up. In individual stock news, shares of ASML Holding slumped nearly 6%, while Volvo Cars dropped 5.9% after scrapping its all-electric target by 2030.

(With inputs from agencies.)