(Bloomberg) -- European stocks posted modest losses on Thursday, pressured by drops across retail and technology and the prospect of higher-for-longer US interest rates. Drugmaker Novo Nordisk A/S slid after sales of its weight-loss drug underwhelmed. 

The Stoxx 600 Index was down 0.2% by the close in London, as most major European markets reopened after a holiday on Wednesday. Results remained in focus, Standard Chartered Plc among the banking stocks to advance after its results topped estimates, while among oil companies, Shell rose as it kept up the pace of share buybacks.

Telecommunications and real estate also gained while retail and technology stocks lagged, the latter the worst-performing subindex. However, Novo shed 2.7% on the day after first-quarter earnings included weaker-than-expected sales for its Wegovy drug, though sales of its Ozempic drug beat expectations.

Read more: Unforgiving Investors Want Bumper Earnings After Record Rally

“Companies that exceed expectations are often penalized, suggesting that the market is eagerly seeking negative news, possibly as a way to fully dispel its ongoing anxiety about the Fed,” said Florian Ielpo, head of macro research at Lombard Odier Asset Management.

Shares of A.P. Moller-Maersk A/S, a bellwether for global trade, declined in volatile trading even though it signaled a strong start to the year had brightened the outlook for container trade demand worldwide. 

Bayer AG rallied as its Monsanto unit persuaded an appeals court in Washington state to throw out a $185 million jury award to three former teachers at a Seattle-area school who blamed exposure to the firm’s toxic chemicals for their brain injuries.

Europe’s benchmark index snapped a five-month winning streak in April, as investors worried sticky inflation would prompt the Federal Reserve to keep interest rates higher for longer. On Wednesday, Fed Chair Jerome Powell signaled fresh concerns about inflation, but indicated the central bank was likely to keep borrowing costs elevated for longer, rather than raising them again.

“As the Fed remains biased to cut rates at some stage, we think equities can remain supported, particularly if consumption growth remains strong as tight labor markets and sticky wage inflation support incomes,” said Jordan Jackson, global market strategist at JPMorgan Asset Management.

Joost van Leenders, senior investment strategist at Van Lanschot Kempen, also said markets had assessed the Fed’s outlook as dovish.

“Although Powell saw several paths for interest rates going forward, he said that it was unlikely that the next policy move is a hike, and that rate hikes were not discussed during the meeting,” he said. “This may have given some relief for markets.”

Meanwhile, Europe is set for a fourth consecutive quarter of negative profit growth, but the outlook is starting to brighten, signaling that the worst of the earnings recession might be over. About halfway into the reporting period, earnings at MSCI Europe firms are set to drop 6.9%, less than the pre-season estimate of almost 11%, according to data compiled by Bloomberg Intelligence.

For more on equity markets:

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  • It’s the Weather, Stupid!: The London Rush

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--With assistance from Natalia Kniazhevich, Michael Msika and Cristin Flanagan.

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