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European stocks continue to rise despite several risks hanging over the market. The pan-European STOXX 600 index started August at record levels, having delivered a strong earnings season, a technology boom and growing investor expectations. Companies have so far demonstrated that neither geopolitical tensions nor higher energy costs have managed to significantly disrupt their results. On the other hand, however, as stock prices rise, so does the bar that companies must clear to convince investors once again.

People's appetite for travel remains strong, but it is becoming increasingly difficult for the aviation sector to turn robust demand into profitability. This was confirmed by the financial results of the German Lufthansa Group, which achieved its highest quarterly revenue in history in the second quarter, but a sharp increase in fuel prices significantly weakened its profits. Moreover, the company issued a less optimistic outlook, which investors did not receive positively. Similar challenges are being faced by the entire European aviation sector.

Although technology companies continue to report enormous revenue growth, the bar for expectations keeps rising. A recent example was the financial results of South Korean memory chip maker SK Hynix, whose record-breaking quarter with triple-digit growth still fell short of investor expectations. The company's shares subsequently dropped sharply as the market once again began questioning the sustainability of investments in artificial intelligence infrastructure. At the same time, the company emphasized that demand for chips remains strong and customers continue to request deliveries, prompting it to secure long-term partnerships with major industry players.