Following Tuesday's decline driven by technology stocks, the Stoxx 600 index experienced choppy trading on Wednesday, moving within a narrow range.

The Stoxx 600 index ultimately closed flat, having fallen by as much as 0.3% during the session. Real estate and chemical sectors were among the best performers, while energy and mining stocks lagged.

Rheinmetall AG was one of the worst performers, with its shares plunging as much as 20%. The German government withdrew from a key warship contract, a move that contributed to a 0.9% decline in Germany's benchmark DAX index.

Other major European indices also edged lower. The Euro Stoxx 50, which tracks eurozone blue-chip stocks, fell 0.4%, while Spain's IBEX 35 and Italy's FTSE MIB indices also closed in negative territory.

"The disappointment in the defense sector triggered a sell-off in Europe, as if the market was waiting for a reason," said Guillermo Hernández Sampere, head of trading at MPPM.

European benchmark indices hovered near record highs following a provisional U.S.-Iran agreement to reopen the Strait of Hormuz. However, persistent declines in oil prices weighed on energy stocks, while the prospect of sustained high U.S. interest rates pressured metals and mining shares.

Additionally, the technology sector remained under pressure from the global sell-off in tech stocks that began earlier in the week. Earnings from Micron Technology Inc., reported late Wednesday in the U.S., were expected to provide some insight into the outlook for chipmakers.

"This could either confirm or deny the possibility of a rotation trade," said Marija Veitmane, head of equity research at State Street Global Markets, regarding Micron's results. "That trade has been tested recently, so we need to see strong earnings from Micron for the tech rally to resume."

In other individual stock movements, UK warehouse giant Segro Plc surged 17% after it rejected a takeover proposal from U.S. rival Prologis Inc.. French biotech firm Abivax SA fell as much as 9.4%, hitting a daily limit down at one point. The stock's move on Wednesday lacked an obvious catalyst, with the shares experiencing heightened volatility recently after breaking below a key technical support level.