European stocks slip as bond yields offset AI rally

European stocks closed lower on Tuesday, reversing earlier gains as investors weighed rising global bond yields against renewed optimism over artificial intelligence spending. The pan-European STOXX 600 index fell 0.1% after trading up to 0.7% higher earlier in the session. Technology and semiconductor shares were the session's clear bright spots before the broader market weakened. Stocks rose after Reuters reported that Anthropic's IPO prospectus indicates a strong increase in cloud, computing, and infrastructure spending, boosting chip stocks across Europe and the US. Notable gainers included ASML Holding (+4.18%), Infineon Technologies (+4.8%), and X-Fab Silicon Foundries (+7.5%). The September losses have broken a six-month winning streak for the STOXX 600, which is down nearly 2% this month and heading for its first monthly decline since March. Government bond yields reached their highest levels since the 2008 financial crisis, while a new European Central Bank rate hike, hawkish central bank rhetoric, and warnings from AI-sector figures about potential development slowdowns all contributed to selling pressure.