European Markets Close Mixed Amid Rising Inflation Concerns

European stock markets experienced a volatile trading session on July 31, 2026, initially reaching record highs before erasing those gains to close mixed. The pan-European STOXX 600 Index initially rose nearly 0.9%, driven by a rally in artificial intelligence-linked technology shares, including Infineon Technologies and ASML Holding. However, the index ultimately ended the day down 0.1% at 649.19. While Germany's DAX and France's CAC 40 managed slight gains of 0.1% and 0.3%, the UK's FTSE 100 dipped 0.3%.

Market sentiment was pressured by data from Eurostat showing that annual consumer inflation in the euro zone rose to 2.9% in July, up from 2.8% in June. This increase, driven largely by higher energy costs, heightened expectations that the European Central Bank will implement an interest rate hike in September.

In the corporate sector, results were varied. Saint-Gobain shares soared nearly 7% after the company confirmed its 2026 outlook, and Engie raised its full-year guidance. Conversely, Melrose Industries saw its shares decline sharply—with some reports citing a drop of up to 9.3%—after the company warned of exceptional costs stemming from a chemical tank incident at its facility in Garden Grove, California.