European stock markets edged lower on Wednesday as oil prices extended their gains amid escalating tensions in the Middle East, while investors continued to monitor developments in the technology sector and global inflation.

Major European indices declined as Brent and West Texas Intermediate crude climbed for a third consecutive session. Oil prices were supported by renewed U.S. military strikes on Iran and the reimposition of a U.S. naval blockade on shipping to and from Iranian ports, heightening concerns over global energy supplies.

Asian equities posted broad gains, led by Seoul, as technology shares recovered after recent losses. Investor sentiment improved following lower-than-expected U.S. inflation data, easing expectations of an imminent Federal Reserve interest rate hike.

Swissquote analyst Ipek Ozkardeskaya said the divergence in global equity markets was largely driven by the renewed outperformance of technology stocks.

South Korea's Kospi surged more than 6%, supported by an 8.8% jump in chipmaker SK hynix. Markets in Tokyo, Hong Kong, Sydney, Singapore, Taipei, Mumbai, Bangkok, Jakarta, and Manila also closed higher.

AI Investment Continues

In China, memory chip manufacturer ChangXin Memory Technologies announced plans to raise up to $9.8 billion through an initial public offering as Beijing continues investing in domestic semiconductor production to strengthen its artificial intelligence capabilities.

Meanwhile, shares of Dutch semiconductor equipment maker ASML rose after the company increased its sales forecast, citing strong demand for AI-related systems and improved second-quarter earnings.

China's stock market underperformed after official data showed second-quarter economic growth slowed more than expected.

In the United States, stronger quarterly earnings from major banks, including JPMorgan Chase, Citigroup, Bank of America, Goldman Sachs, and Wells Fargo, helped support investor confidence. However, IBM shares fell sharply after disappointing earnings results.

Investors Watch Interest Rate Outlook

The U.S. dollar traded mixed against major currencies as expectations of a near-term Federal Reserve rate increase eased following softer inflation data.

Despite that, Federal Reserve Governor Kevin Warsh cautioned that policymakers remain focused on controlling inflation, saying the central bank has "no tolerance" for persistently elevated prices.