Key Takeaways
- European markets experienced significant downturns as several major companies, including Renault (RNO), ASML (ASML), and Fuchs (FPE), issued downbeat financial guidance and lowered outlooks for the fiscal year and upcoming quarters.
- Nvidia (NVDA) CEO Jensen Huang lauded China's advanced and sophisticated supply chain and described Huawei as an incredible technology company, amidst ongoing discussions about U.S. chip export controls.
- Ford Motor Company (F) announced a recall of 694,217 US vehicles due to a fuel leak risk that could potentially lead to fires.
- The Chinese Foreign Ministry confirmed that China and the EU Parliament have agreed to lift all restrictions on mutual exchanges, signaling a potential improvement in diplomatic ties.
European markets faced a challenging trading session as several key players revised their financial expectations downwards. Renault (RNO) saw its shares drop by 15% after providing dreary full-year guidance and highlighting a poor retail market. The automaker now anticipates an operating margin of around 6.5% for FY25, a reduction from its previous target of 7% or more, with free cash flow also projected lower at €1 billion to €1.5 billion. This comes after preliminary first-half results were impacted by a softening retail market, operational headwinds, and working capital challenges, including a €900 million hit from working capital issues.
Chipmaking equipment giant ASML (ASML) also contributed to the negative sentiment, with its stock falling 7.0% after lowering its Q3 revenue and margin outlook and not confirming its 2026 growth target. The company expects Q3 2025 total net sales between €7.4 billion and €7.9 billion, with a gross margin between 50% and 52%. Similarly, German lubricants manufacturer Fuchs (FPE) experienced a 12.0% decline following a reduction in its full-year earnings guidance, now expecting sales and EBIT to remain at last year's levels of €3.5 billion and €434 million, respectively. This adjustment was attributed to muted demand from key customer groups, slow industrial production in Europe, and ongoing geopolitical tensions. K+S (SDF) was also downgraded by Baader, contributing to the overall negative trend, while Stellantis (STLA) shares dropped 4.3%.
In the technology sector, Nvidia (NVDA) CEO Jensen Huang made notable comments regarding China's technological landscape. Huang praised China's supply chain as "very advanced and sophisticated" and referred to Huawei as a "really incredible technology company". He emphasized that China's open-source AI is a "catalyst for global progress" and that it's crucial for American companies to compete in the dynamic Chinese market, especially after Nvidia received approval to resume sales of its H20 AI chips to China.
Meanwhile, Ford Motor Company (F) announced a significant safety recall affecting 694,217 US vehicles. The recall is due to a fuel leak that, in the presence of an ignition source like hot engine or exhaust components, can increase the risk of a fire. The recall covers various models from 2021-2023, and while Ford plans to notify affected owners, a remedy for the issue is still under development.
On the geopolitical front, the Chinese Foreign Ministry confirmed that China and the EU Parliament have decided to lift all restrictions on mutual exchanges. This move aims to deepen communication and understanding, injecting new impetus into the development of China-Europe relations. Separately, former U.S. President Trump was quoted stating that Iran "wants to talk" but that he is "in no rush to talk," indicating ongoing, albeit cautious, diplomatic engagement. Negotiations between the U.S. and Iran regarding a nuclear peace agreement began in April 2025, with Trump expressing hope for a deal despite existing differences.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.