European equities displayed divergent trajectories on Wednesday, with semiconductor giant ASML's disappointing outlook triggering a broad tech selloff while trade negotiations and corporate earnings remained focal points for investors.

By 08:36 GMT, the pan-European STOXX 600 index edged down 0.2% to 544.14 points. Regional benchmarks showed varied performance: Germany's DAX gained 0.1%, Spain's IBEX jumped 0.7%, and the UK's FTSE 100 rose 0.2%, while France's CAC 40 remained essentially unchanged.

ASML shares plunged 7.7%, poised for their steepest single-day decline in approximately nine months. The world's premier chipmaking equipment supplier cautioned that despite beating second-quarter order expectations, growth targets for 2026 might prove unattainable.

This grim forecast slammed the technology sector, which tumbled 1.3%. European chipmakers followed suit, with BE Semiconductor sliding 2.8% and ASMI retreating 3.8%.

Fresh profit warnings revealed deteriorating corporate health across Europe, exacerbated by heightened uncertainty stemming from recent U.S. tariff declarations. Antje Tschuvalli, multi-asset strategist at UBS Global Wealth Management, observed: "Earnings season suggests Europe faces the most severe impact," citing tariff-induced instability, weakening business confidence, and margin compression from inventory gluts.

Stateside, market attention pivoted to impending producer price data after Tuesday's consumer inflation figures confirmed tariffs were fueling price pressures.

Trade developments saw new U.S. tariffs imposed on Indonesian goods at 19% alongside fresh details on planned pharmaceutical levies. Meanwhile, investors monitored U.S.-EU trade talks, with Brussels prepared to enact countermeasures should negotiations collapse.

Automotive stocks skidded 1.3% across Europe, led by Renault's 15.9% nosedive to multi-year lows. The French manufacturer simultaneously downgraded its full-year operating margin forecast and appointed CFO Duncan Minto as interim chief executive. Stellantis dropped 3.3% after axing its hydrogen fuel cell initiative and canceling planned hydrogen vehicle launches.

Contrasting this downturn, Partners Group surged 5.3% as the asset manager posted stronger-than-expected half-year assets under management while affirming its annual outlook.

Economic data revealed unexpected acceleration in UK inflation, with June's consumer price index hitting 3.6% year-on-year - a 13-month peak that exceeded May's 3.4% reading.