(Bloomberg) -- European stocks fell as investors awaited comments from the Jackson Hole symposium and digested US data that showed applications for unemployment benefits fell to the lowest level in three weeks.

The Stoxx Europe 600 was down 0.4% by the close in London, with technology stocks being the region’s biggest decliner, while financial services stocks advanced.

Despite making a strong start to the session, fueled by Nvidia Corp.’s blowout earnings forecast, technology stocks erased gains as the artificial intelligence rally proved to be short lived. Nvidia’s peers, ASM International NV and BE Semiconductor Industries, gained before eventually declining.

The rally in both European and US stock indices following Nvidia’s results “ran out of puff as investors took money off the table ahead of Jerome Powell’s Jackson Hole speech on Friday,” Axel Rudolph, senior market analyst at IG said. He added that the Federal Reserve Chair is expected to “disappoint investors looking for reassurance that US rates have peaked.”

Investors “remain more wary on Europe,” said Janet Mui, head of market analysts at RBC Brewin Dolphin, adding that the contraction in services Purchasing Managers’ Indexes is a “red flag” recession is still likely.

“And of course, the enthusiasm currently is in tech, to which European indices have small exposure only, and the short-term rally may run out of steam,” she added.

Meanwhile, former Federal Reserve Bank of St. Louis President James Bullard said a pickup in economic activity this summer may delay the Fed’s plans to wrap up interest-rate increases. Speaking in an interview with Bloomberg Television, Bullard said the re-acceleration in the US economy “could put upward pressure on inflation, stem the disinflation that we’re seeing and instead delay plans for the Fed to change policy.”

Among individual stocks, Harbour Energy Plc dropped after the oil and gas company reported a first-half loss and narrowed its production outlook range. UBS Group AG advanced, leading gains in the financial services subgroup, after the Zurich-based lender was reported to have set a target of winding down Credit Suisse Group AG’s domestic bank.

European natural gas prices slumped as a labor dispute at Australia’s biggest liquefied natural gas export plant seemed to have reached a resolution, avoiding strikes. Unions representing workers at Woodside Energy Group Ltd.’s North West Shelf LNG operations were considering a “strong offer” from the company. Prices later erased some losses as unions representing workers at two Australian facilities voted in favor of industrial action, though strikes were still not guaranteed to go ahead.

“The significant events of this week include the fluctuation of gas prices and the anticipation of the next interest-rate movements by the Fed and the ECB, preceding Jerome Powell’s speech,” said Susana Cruz, a strategist at Liberum Capital. “Certainly, the resolution of disputes with Woodside will be good news for the markets because it reduces the upside risk to the eurozone and UK inflation.” 

Powell is due to speak at Jackson Hole on Friday, with cooling inflation leading to increasing views that the US central bank’s tightening campaign may be near a close. 

For more on equity markets:

  • Bounce in China-Exposed Sectors Comes With Risks: Taking Stock
  • Europe’s Stock Markets Struggling for Tech Exposure: ECM Watch
  • Nvidia’s AI Windfall Set to Rescue Nasdaq 100 From Dismal August

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