European equity markets soared on Thursday as a strong rally in semiconductor and technology stocks, along with renewed optimism about possible U.S. Federal Reserve rate cuts, pushed indices to new highs.

The pan-European STOXX 600 rose about 0.7 % to 568.7 points, marking an intraday record. Germany’s DAX led the gains, climbing around 1.3 %. Technology stocks surged ~2.3 %, helped by overnight strength in U.S. tech and news that Samsung and SK Hynix will supply memory chips to OpenAI.

Chip equipment names like ASML and ASMI saw double-digit gains, among the top contributors to STOXX’s advance. Healthcare also extended its rally (~0.6 %) after easing uncertainty from a U.S. drug pricing deal involving Pfizer. Automotive stocks joined the move—Stellantis jumped ~7 %, Volvo Cars gained ~5 % after strong U.S. sales.

However, sentiment remains sensitive to external risks. A looming U.S. government shutdown could delay the release of key economic data, such as Friday’s non-farm payrolls, which are closely watched for indications of the Fed’s next moves.

Investors are now watching for follow-through in earnings, inflation prints in Europe, and clarity on U.S. fiscal standoffs to assess whether the rally can be sustained.