European shares slipped on Wednesday after a strong finish to the second quarter and amid caution over signs of a new stalemate in peace talks between Iran and the United States. The pan-European ‌STOXX 600 index was down 0.3% at 639.64 points by 0710 GMT after logging its strongest quarter since October 2020 in the previous session.

The technology sector, which has been a key driver over the past three months, was flat, with chip equipment maker ASML down 1.1% and IQE and Infineon trading marginally lower. Schneider Electric lost 2.1% after the AI ​​equipment maker said it signed an agreement to acquire Cognite Holdings, a private provider of AI software and industrial data, for $3.1 billion in an all-cash deal.

The focus will be on the European Central Bank’s Sintra conference, where US Federal Reserve Chairman Kevin Warsh and ECB President Christine Lagarde are expected to speak later in the day. LSEG-compiled data showed traders expect interest rate hikes by at least 25 basis points by each of the major central banks later this year.

Oil prices have returned to pre-Iran war levels, however, the concern is that price pressures will remain for some time. Among the top movers, Primark owner Associated British Foods shed 2.7% after it said it still expected annual profit to be lower than the previous year’s result, adding that the Middle East conflict had hit its European profit outlook.

Swedish defense equipment maker Saab gained 1.7% after signing a contract to deliver 16 Gripen E fighter aircraft to Ukraine in a deal worth about 24.6 billion Swedish crowns ($2.54 billion). Elsewhere, Iran said it would not meet with top US envoys who flew to the region after the outbreak of hostilities, clouding prospects for lasting peace between the two countries.