- European indices closed mostly lower Wednesday, with the CAC 40 down 0.79% and the Euro STOXX 50 off 0.72%, while the DAX bucked the trend with a modest 0.18% gain
- US tech sold off sharply overnight — Nasdaq 100 fell 1.52% and XLK dropped 2.57% — setting up pressure on European tech names like ASML and SAP at the open
- Oil slid 1.31% to $67.70, adding weight to Shell and BP, while gold climbed 0.44% above $4,090 as investors rotated toward defensives
Where Europe Closed Last Session
Wednesday’s session left most of Europe in the red, with France leading the declines. The CAC 40 fell 0.79% to 8,337.29, dragged lower by broad selling across luxury and industrials. The Euro STOXX 50 followed suit, dropping 0.72% to 6,282.50 — the sharpest loss among the major benchmarks.
The Netherlands and Switzerland also took hits. The AEX slid 0.65% to 1,073.14, with ASML likely feeling the same tech headwinds that would hammer US names overnight. The SMI lost 0.56% to 14,114.00, as Swiss defensives like Nestlé and Roche couldn’t fully offset weakness elsewhere.
Spain’s IBEX 35 dipped 0.34% to 19,406.60 and Italy’s FTSE MIB edged down 0.15% to 51,605.00 — mild losses but still on the wrong side of flat. The UK’s FTSE 100 shed 0.18% to close at 10,478.30, a measured decline that kept it near recent highs.
The outlier was Germany. The DAX 40 gained 0.18% to 25,040.28, holding above the psychologically important 25,000 level. Industrial and financial names continue to prop up the index even as the broader eurozone softens. That divergence — DAX green, CAC and STOXX red — tells you sector composition matters more than geography right now.
US Overnight Snapshot
The overnight US session delivered a clear message: sell tech, buy banks. The Nasdaq 100 dropped 1.52% and the technology sector ETF (XLK) fell 2.57% — the steepest single-sector decline of the day. CoreWeave and Nebius tumbled as Meta signaled it could become a direct threat in the cloud AI infrastructure space, dragging the broader AI trade lower. AMD bucked the trend on a Wells Fargo price target raise to $615, but it wasn’t enough to lift the sector.
The S&P 500 held up better at -0.22%, cushioned by a 2.18% surge in financials (XLF). Materials gained 0.37%. The VIX ticked up to 16.6, a 0.85% move — still well below the 20 threshold but drifting higher as quarter-end rebalancing plays out.
For Europe, the tech rout matters directly. ASML, SAP, and Infineon will likely feel selling pressure at the open. But the financials bid could give eurozone banks — BNP Paribas, Deutsche Bank, UniCredit — a tailwind if the rotation theme carries over.
Commodity + FX Watch
Gold pushed above $4,090, up 0.44%, continuing its steady grind higher as investors hedge against equity volatility. That supports gold miners on the FTSE 100 like Fresnillo and Endeavour Mining.
Crude oil slipped 1.31% to $67.70, marking another leg lower in a move that’s been building for weeks. The “How Low Can Crude Oil Go?” headline captures the mood. Shell, BP, and TotalEnergies will carry that weight into the Thursday session. Retail diesel prices are falling even as futures diverge from crude — a dynamic worth monitoring for European refining margins.
Copper edged up 0.41% to $6.15, a modest positive for mining-heavy indices. The dollar strengthened on month- and quarter-end demand, which typically fades quickly into the new period. USD/JPY fell 0.48% to 162, reflecting yen strength that could signal risk-off positioning in Asia. AUD/USD dipped 0.20% to 0.69.
What to Watch Today
- Tech open reaction: With XLK down 2.57% and the Nasdaq off 1.52%, European tech is the obvious pressure point. Watch ASML’s first 30 minutes — it tends to set the tone for the sector across the continent. SAP and Infineon follow.
- Eurozone manufacturing PMI finals: July 2 brings final June PMIs across the eurozone. Any downward revision from flash readings would add to the risk-off tone, particularly for the already-weak CAC 40 and Euro STOXX 50.
- Bank rotation spillover: US financials surged 2.18% on Wednesday. If that bid carries into European hours, BNP Paribas, Deutsche Bank, and Barclays could lead a counter-rally that offsets tech weakness — the same dynamic that kept the DAX green yesterday.
- Oil and energy drag: WTI at $67.70 puts Shell and BP on the defensive. With retail diesel falling and crude futures under pressure, the energy complex looks like a headwind for the FTSE 100 specifically.
Bottom Line
Thursday’s setup leans risk-off for European tech but risk-on for banks and miners — a split personality that could keep headline indices choppy. The DAX has the best shot at another green day if financials and industrials hold, while the CAC 40 and Euro STOXX 50 face headwinds from the US tech selloff and soft oil prices. Luna3 sees this as a stock-picker’s session: the index-level moves may be small, but the sector rotation underneath is worth paying attention to.
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