(Bloomberg) — European equities fell as weak luxury-sector earnings added to negative sentiment around the profit outlook for the semiconductor industry. The pound slid as a drop in UK inflation spurred increased bets on interest-rate cuts.

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The Stoxx 600 index retreated 0.3% after chip-making giant ASML Holding NV extended losses following its profit warning on Tuesday. LVMH and Salvatore Ferragamo SpA led the retreat in luxury stocks after weak updates, both slumping as much as 7%. US equity futures were little changed.

ASML’s slide sent ripples across the industry, resulting in more than $420 billion of market-value losses for an index of US-traded chipmakers and the largest Asian stocks. Nvidia Corp. sank nearly 5% on Tuesday, after reaching a record close earlier this week. The shares were steady in premarket trading Wednesday.

While the weakness in names like Nvidia and ASML has an impact on the broader market, Peter Fitzgerald, chief investment officer for macro and multi-asset at Aviva Investors, pointed to the continued strength of demand for artificial intelligence as well as supportive central bank policy.

“Our view is that there is enough underlying strength in markets,” he said. “Particularly with central banks on an easing path providing broad support.”

Sterling slid 0.6% to $1.2990, its lowest level since Aug. 20. Figures Wednesday showed consumer prices rose just 1.7% in September compared to a year earlier, less than forecast by economists. FTSE 100 outperformed European indexes and UK gilts fell as the data emboldened investors to bet on more aggressive easing from the Bank of England.

Bloomberg’s dollar index ticked higher after climbing to its strongest level in about two months after former President Donald Trump defended proposals to raise tariffs on foreign imports. Atlanta Fed President Raphael Bostic said he expects the US economy to slow this year but to remain robust, adding that the downward path for inflation could see some bumps. Treasury yields edged lower.

In Asia, a Bloomberg gauge of China’s property shares surged as much as 8.3% as markets prepared for a joint news conference to be held by government officials including the housing minister and central bank on Thursday.

Chinese stocks have whipsawed since late September, when a series of stimulus measures by the central bank unleashed a burst of optimism that has begun to unravel. Investors are watching to see if the authorities deploy greater firepower to bolster the economy.

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“What is really key for European stocks is what happens to consumer sentiment and consumer spending in China,” said Lilian Chovin, head of asset allocation at Coutts. “To what extent the measures announced in China are effective at boosting consumer sentiment over there, because that’s what would really help autos, luxury goods and all those very Chinese sensitive sectors in Europe.”

The yen traded at around 149 per dollar after Bank of Japan Board Member Seiji Adachi emphasized the need for taking a gradual approach to raising the benchmark interest rate.

Key events this week:

• Morgan Stanley earnings, Wednesday

• ECB rate decision, Thursday

• US retail sales, jobless claims, industrial production, Thursday

• Fed’s Austan Goolsbee speaks, Thursday

• China GDP, Friday

• US housing starts, Friday

• Fed’s Christopher Waller, Neel Kashkari speak, Friday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 fell 0.3% as of 9:37 a.m. London time

• S&P 500 futures were little changed

• Nasdaq 100 futures were little changed

• Futures on the Dow Jones Industrial Average were little changed

• The MSCI Asia Pacific Index fell 0.9%

• The MSCI Emerging Markets Index fell 0.5%

Currencies

• The Bloomberg Dollar Spot Index rose 0.1%

• The euro fell 0.1% to $1.0879

• The Japanese yen fell 0.1% to 149.38 per dollar

• The offshore yuan rose 0.1% to 7.1277 per dollar

• The British pound fell 0.6% to $1.2999

Cryptocurrencies

• Bitcoin rose 1.1% to $67,192.49

• Ether rose 1.6% to $2,612.59

Bonds

• The yield on 10-year Treasuries declined two basis points to 4.01%

• Germany’s 10-year yield declined three basis points to 2.19%

• Britain’s 10-year yield declined seven basis points to 4.09%

Commodities

• Brent crude fell 0.1% to $74.15 a barrel

• Spot gold rose 0.6% to $2,677.53 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Winnie Hsu and Sujata Rao.

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