- FTSE 100 dropped 1.04% while the DAX and CAC gained, opening a rare UK-vs-continent divergence heading into Friday
- US tech surged 3% overnight with Intel jumping 11% on an Apple chip deal — ASML, SAP, and Infineon should feel the tailwind at the open
- Fed dot plot showed nearly half of FOMC members project at least one rate hike this year, a hawkish signal that could test European rate-sensitive sectors
Where Europe Closed Last Session
London was the clear outlier on Thursday. The FTSE 100 dropped 1.04% to 10,399.70, pulling away from a continental bloc that managed modest gains. The DAX 40 added 0.37% to 25,026.80, the CAC 40 rose 0.44% to 8,467.98, and the Euro STOXX 50 climbed 0.37% to 6,323.27 — a coordinated eurozone bid that left the UK behind.
The split tells a sector story. London’s commodity-heavy index suffered as oil and mining names dragged, while Frankfurt and Paris benefited from tech and luxury exposure catching a bid. The SMI slipped 0.36% to 13,765.83, with Swiss defensives failing to attract flows in what was otherwise a mild risk-on day. The IBEX 35 was flat at -0.09%, and the FTSE MIB eked out a 0.18% gain — neither conviction nor capitulation from southern Europe.
Copenhagen stood out. The OMX Copenhagen 25 jumped 0.96% to 1,760.81, suggesting healthcare and shipping names found buyers. The AEX dipped 0.12%, a muted session for Amsterdam that belies the overnight setup now building from across the Atlantic.
US Overnight Snapshot
Wall Street delivered a broad rally that European traders will be pricing in at the open. The S&P 500 gained 1.08%, the Nasdaq Composite surged 1.91%, and the Russell 2000 jumped 1.97% — small caps joining the party signals genuine breadth, not just mega-cap carry.
The standout was technology. The XLK sector ETF rose 3.04%, turbocharged by Intel’s 11% spike on reports of a new Apple chip manufacturing deal. That kind of semiconductor momentum translates directly to ASML, Infineon, and STMicroelectronics when European exchanges open. The VIX collapsed 11% to 16.4 — comfortably below 20 and signaling that options markets see smooth sailing near-term.
The laggards matter for London. US financials fell 0.89% and energy dropped 1.65%, both sectors that dominate the FTSE 100. Thursday’s UK underperformance may extend into Friday if the sector rotation out of value and into growth continues.
Commodity + FX Watch
Gold fell 1.50% to around $4,160 — classic risk-on behavior as money rotated into equities. That’s a headwind for Swiss gold refiners and London-listed miners like Fresnillo. WTI crude slipped 0.39% to $76.30, a modest decline but enough to keep Shell and BP on the back foot after Thursday’s FTSE drag. Copper dropped 0.74%, which pressures Glencore and the broader materials complex — the XLB was down 0.40% in the US session too.
On currencies, USD/JPY pushed to 161 (+0.41%), reflecting dollar strength after the Fed’s hawkish dot plot. AUD/USD was flat at 0.701. For European exporters, a firmer dollar generally helps — Airbus, LVMH, and SAP all earn significant revenue in USD. Watch EUR/USD and GBP/USD at the open for confirmation of whether the dollar bid extends.
What to Watch Today
- European tech at the open: With US tech up 3% and Intel surging on the Apple deal, ASML, SAP, Infineon, and STMicroelectronics are the first names to watch for gap-up behavior. The semiconductor supply chain story has fresh momentum.
- Fed rate hike projections: Nearly half of FOMC members now project at least one rate hike this year. European bond markets will need to digest this — rising US yields tend to pull Bund yields higher, which pressures rate-sensitive real estate and utility names across the STOXX 600.
- FTSE 100 divergence test: London underperformed by over a full percentage point on Thursday. If energy and mining stay soft while tech rallies, the UK-continent gap could widen further. Watch whether UK domestic banks (Barclays, NatWest) find a bid to offset commodity weakness.
- Iran agreement risk premium: Headlines flagged Trump’s Iran agreement as a potential buy signal for stocks. Any progress on the deal reduces the oil geopolitical premium — bullish for consumers and airlines (IAG, Ryanair, easyJet), bearish for North Sea producers.
Bottom Line
The setup favors risk-on for continental Europe this Friday. A 3% US tech rally, crushed VIX, and broad small-cap participation all point to a constructive open for Frankfurt and Paris — particularly in semiconductors and growth names. London faces a harder morning: the commodity drag that cost the FTSE a full point on Thursday hasn’t lifted, and the Fed’s hawkish lean adds a new pressure point. Luna3 sees a two-speed European session ahead — lean into the DAX tech bid, stay cautious on UK-listed energy and miners until the sector rotation shows signs of reversing.
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