European Stocks Stumble Amid Banking Woes and Inflation Fears

European stocks took a hit on Wednesday, receding from two-month highs as shares of Julius Baer took a nosedive. The Swiss bank announced a 130 million Swiss franc charge from a credit portfolio review, leading to a 5.6% drop in its shares, and revealed plans to replace its chief risk officer.

The pan-European STOXX 600 index dipped by 0.2%, dragged down primarily by auto and retail sectors. JD Sports suffered an 8.4% decline after cautioning that rising prices in the U.S. could dampen customer demand, compounded by a 2% drop in its first-quarter sales. Separately, British inflation figures overshot expectations, raising concerns about potential challenges for the Bank of England's interest rate policies.

As the U.S. grappled with ongoing trade discussions and tax reforms, investor anxiety heightened, contributing to the market downturn. Meanwhile, German chipmaker Infineon saw a 1.7% uptick thanks to a partnership with Nvidia on AI data center technology, and Marks & Spencer faced a 3.3% fall due to a costly cyberattack.

(With inputs from agencies.)