European stocks recover amid stabilization in bond sell-offs

Wall Street managed to overcome a sharp decline that hit its three major indices on Tuesday due to tariffs and their impact on rising long-term bond yields, breathing new life supported by gains from Alphabet, the parent company of Google, after a favorable antitrust ruling. Investors are also awaiting U.S. labor market data that could influence the Federal Reserve’s upcoming interest rate decisions.

After the Dow Jones Industrial Average rose 0.03% at the start of trading, it slipped slightly by 0.26%, while the S&P 500 increased by 0.47%, and the Nasdaq Composite advanced 0.86%.

Alphabet’s stock rose to a new record high following a court ruling that allowed its Google subsidiary to retain the Chrome internet browser. The company’s shares jumped 7.88% to $228 during trading, marking an all-time high. The ruling also enabled the company to continue payments to partners like Apple related to its search engine.

Apple shares, owner of the iPhone, also saw a strong rise of 3%, surpassing $235.5.

Europe

European stocks rose, recovering from sharp losses in the previous session, as long-term bond sell-offs stabilized while investors awaited U.S. jobs data. The STOXX 600 index climbed 0.51%, driven by a 1.3% gain in the technology sector, which posted the best performance.

Adidas shares rose 2.5% after Jefferies brokerage upgraded the German sportswear brand’s stock to “buy” from “hold,” citing increased diversity in the company’s growth drivers. Swiss Life shares fell 2.4% after the insurer reported a decline in first-half net profits due to higher tax expenses.

Japan

Japanese stocks closed at their lowest level in about four weeks, affected by declines in bank shares after comments from a senior Bank of Japan official lowered expectations for an early rate hike.

The Nikkei index fell 0.88% to close at 41,938.89 points, while the broader Topix index dropped 1.07% to 3,048.89, marking their lowest closing levels since August 8.

Bank of Japan Deputy Governor Ryozo Himino said the central bank should continue raising interest rates but warned that global economic uncertainty remains high, indicating the bank is in no rush to increase borrowing costs that are still low.

Seiichi Suzuki, chief equity analyst at Tokai Tokyo Intelligence Laboratory, said, “Market expectations for a Bank of Japan rate hike have declined following Himino’s cautious comments about the impact of U.S. tariffs.”

He added, “Clearly, the buying momentum from foreign investors, who supported the rise in local stocks, has faded.”

Optimism about local corporate outlooks and easing concerns over U.S. President Donald Trump’s tariffs had pushed the Nikkei and Topix indices to record highs last month.

The trade agreement reached in July between Washington and Tokyo opened the door for the Bank of Japan to raise interest rates again this year.

The banking index fell 3.19%, becoming the worst-performing sub-index among 33 in the Tokyo Stock Exchange.

Mitsubishi UFJ Financial Group shares lost 3.15%.

Shares of Sumitomo Mitsui Financial Group and Mizuho Financial Group each dropped more than 3%, and the insurance sector declined 2.73%. Tokyo Electron, a semiconductor equipment maker, fell 1.92%, while SoftBank, a technology investment group, dropped 5.27%.

Fast Retailing, owner of the Uniqlo clothing brand, rose 0.5%, providing the largest support to the Nikkei index.