Europe shares open mixed as US losses and inflation data curb risk appetite

• Eurostoxx down 0.8%
• Germany's DAX losing 0.4%
• France's CAC 40 up 0.1%
• UK's FTSE adding 0.1%
• Spain's IBEX ahead 0.2%
• Italy's FTSE MIB off 0.5%

Europe's trading day is off to a mixed start, though the overall mood leans toward the cautious side. German and Italian equities are under the most pressure, while French and Spanish shares are just about holding onto slight gains.

Given the decline on Wall Street yesterday, the cautious stance here comes as no surprise: the S&P 500 lost 1.1% and the Nasdaq slumped 1.9%. The US CPI report, which was hotter than expected, did not help matters either, leaving investors to reconsider the prospect of the Fed keeping rates "higher for longer".

That said, the main worry is the continued strain on tech shares, especially those tied to the AI boom. The latest drop is raising fresh questions about whether the breadth and momentum behind the resilience of the past few weeks are starting to unravel.

With 10-year Treasury yields down to 5.10%, a three-week low, investors appear to be looking beyond the immediate bond market moves.

All of this makes for an awkward setting for European equities. For the moment, the drop in bond yields is bringing a degree of comfort. Still, as long as inflation worries persist and Wall Street remains shaky, investors are not exactly eager to pile into risk assets.

It will take watching how US stocks perform later in the day to get a clearer read on risk appetite in the second half of this week.