The pan-European STOXX 600 touched its highest-ever intraday level on Friday, climbing 0.9% to 655.45 before giving back gains to close 0.1% lower at 649.19 [1]. The record print marked the index's fourth straight monthly gain, driven by tech stocks that jumped 1.7% tracking Asian peers [2].

Soitec added 7%, Infineon Technologies rose 5.8%, ASML inched 2.7% higher, and Aixtron topped the index with a 9% jump [1]. The rally tracked a global AI-fueled tech surge following blowout Microsoft and Amazon earnings. South Korean shares soared 16% on a renewed surge of investment into semiconductor stocks, and the KOSPI posted its biggest single-day gain in 46 years.

But the story beneath the record was Universal Music Group, which slumped 22.7% — its biggest single-day loss on record — after first-half results [1]. The STOXX 600 media index lost 4.6%, a sharp counterpoint to the tech optimism. Teleperformance jumped 7.4% after reaffirming 2026 targets, while Puma fell 6% on a disappointing outlook.

UBS analysts warned that operating cash flow at hyperscalers will be overtaken by their cash capex, raising the risk of AI spending in 2028 coming in below 2027 levels [1]. That estimate is the note beneath the record: the market can sustain a tech rally only as long as the capex cycle delivers returns. The fourth straight monthly gain looks like strength; the intraday fade and the UMG crash suggest the foundation is narrower than the headline implies.

-- CHARLES ASHFORD, London