European Stocks Open Lower as Investors Digest Mixed Earnings from Airbus, Renault, Nestlé Amid Global Caution

European equities opened in negative territory on Thursday, as investors parsed a wave of corporate earnings reports—including results from Airbus, Renault, and Nestlé—while broader market sentiment remained cautious ahead of key U.S. data releases and ongoing geopolitical developments.

The pan-European STOXX 600 index traded just below flat in early dealing, with the U.K.’s FTSE 100 down 0.2%, Germany’s DAX 0.3% lower, and France’s CAC 40 also off 0.3%. Spain’s IBEX, heavily weighted toward banks, bucked the trend with a small gain.

Key Earnings Highlights

• Airbus shares fell 5.4% in early trading after the company said it expects to deliver around 870 commercial aircraft in 2026—slightly below the analyst consensus of roughly 880. CEO Guillaume Faury cited persistent engine shortages from Pratt & Whitney as the primary constraint, describing the situation as “unsatisfactory” and noting that even CFM (the other major engine supplier) cannot offset the shortfall in 2026. Airbus plans to enforce contractual rights with Pratt & Whitney, which could escalate into a legal dispute if no amicable solution is reached. The update comes as Boeing shows signs of recovery under CEO Kelly Ortberg, with improved production stability and a recent order advantage over Airbus.
• Renault reported 2025 revenue up 3% to €57.9 billion ($68 billion), but posted a significant net loss of €10.9 billion, heavily impacted by a one-off charge related to its investment in Nissan. CEO François Provost cited a “challenging market environment” in 2025. Shares rose 2% shortly after the open, reflecting relief that the core business performance was not worse.
• Nestlé reported full-year 2025 sales of 89.49 billion Swiss francs (down 2% from 91.35 billion francs in 2024) and net profit down 17% to 9 billion Swiss francs. Organic growth stood at 3.5%. The company is in advanced negotiations to sell its ice cream business to Froneri (owner of Häagen-Dazs). Shares rose nearly 3% in morning trading despite the profit decline, buoyed by the divestment news and resilience in core categories. The recent baby formula recall over toxins remains a lingering concern.

European stocks have shown resilience in recent weeks despite earlier volatility from AI disruption fears. A better-than-feared earnings season—coupled with the view that AI threats to traditional businesses may be overstated in the near term—helped the STOXX 600 reach a record high last week and post its third consecutive weekly gain.

Financials have led the recovery after last week’s heavy selling on AI concerns. Banks and insurers rebounded strongly on Monday, suggesting investors are increasingly viewing AI as a tool for operational efficiency rather than an existential threat to financial services. The week ahead remains data- and earnings-heavy.

In the U.S., the delayed January nonfarm payrolls report (Wednesday) and consumer price index (Friday) will dominate global sentiment. Euro zone industrial production data released earlier showed a 1.2% year-on-year increase in December—down from November’s 2.5% gain—but still signaled underlying resilience.

Oil prices rose more than 4% on Wednesday after U.S. Vice President JD Vance stated that Iran had not addressed core U.S. demands in recent nuclear talks. Vance reiterated President Trump’s position that military force remains an option if diplomacy fails to halt Iran’s nuclear program. Brent crude is trading near six-month highs around $68 per barrel, supported by geopolitical risk premiums and expectations of seasonal demand recovery.

In the Asia-Pacific, markets traded higher overnight, with several bourses returning from Lunar New Year holidays. Tokyo extended its rally following Prime Minister Sanae Takaichi’s decisive election victory.

Sector and Thematic Drivers

Financials continue to lead the recovery after last week’s AI-related selloff. Investors appear to be reassessing the immediacy of disruption risks to banking and insurance models.

• Technology and luxury remain under pressure, with concerns about AI-driven competition and margin erosion.
• Basic materials pulled back slightly after recent strength, reflecting mixed commodity signals.
• Energy sentiment is supported by geopolitical developments in the Middle East.

The mixed earnings results and ongoing macro uncertainty suggest European equities could remain range-bound in the near term. The week’s U.S. data releases—particularly payrolls and CPI—will likely set the tone for global risk appetite. Strong U.S. labor and inflation figures could reinforce higher-for-longer rate expectations, pressuring equities; softer data would revive rate-cut hopes and support risk assets.

With geopolitical risks (U.S.-Iran, Ukraine, Middle East) still elevated and earnings season in full swing, volatility is expected to remain high. Investors are increasingly differentiating between companies that can leverage AI for efficiency gains and those vulnerable to disruption—trends that will likely dominate European equity performance through the first half of 2026.