- European indices surged Thursday — DAX +2.16%, FTSE 100 +1.67%, SMI +1.69% — setting a strong base heading into Friday's open
- US tech sold off sharply (XLK -2.71%, Nasdaq -0.80%) after a tepid jobs report, which will pressure European tech names like ASML and SAP at the open
- Gold hit +1.79% and copper rallied +2.06% as the dollar weakened on soft employment data — miners and commodity plays in London could see follow-through
Where Europe Closed Last Session
Thursday was a broad rally day across the continent. The DAX 40 led with a +2.16% surge to 25,580.88, its strongest single-session gain in weeks. Germany’s export-heavy index benefited from improving global trade sentiment and falling bond yields. The SMI in Zurich kept pace at +1.69% to 14,352.98, with defensive heavyweights Nestlé and Roche catching bids alongside the risk-on move.
The FTSE 100 climbed +1.67% to 10,652.90, lifted by commodity producers as copper and gold both pushed higher. Paris matched London — the CAC 40 rose +1.65% to 8,474.86. Southern Europe joined the party: the FTSE MIB gained +1.59% to 52,428.00 and Spain’s IBEX 35 added +1.37% to 19,671.80, both reflecting renewed appetite for peripheral eurozone bank exposure.
The lone laggard was Amsterdam’s AEX, which slipped -0.04% to 1,072.74. That underperformance likely reflects ASML’s weight in the index — semiconductor names were already under pressure before Wall Street’s tech rout confirmed the rotation thesis overnight.
US Overnight Snapshot
The S&P 500 finished essentially flat while the Nasdaq Composite dropped -0.80%, dragged lower by a sharp -2.71% decline in the technology sector (XLK). The catalyst: a tepid US jobs report that pushed the Dow to a fresh record on rate-cut hopes but punished high-multiple growth stocks. The Russell 2000 slipped -0.58%.
The rotation was textbook. Financials (XLF) gained +1.53% and materials (XLB) rallied +1.94% as traders priced in a friendlier Fed path. The VIX dropped to 16.1, down -2.65% — complacency rather than stress. For Europe, the tech weakness is the immediate read-through: ASML, SAP, and Infineon will feel the Nasdaq drag at the open. But the financials bid could lift BNP Paribas, Deutsche Bank, and Barclays.
Commodity + FX Watch
Gold surged +1.79% to around $4,190 as soft employment data weakened the dollar and reinforced rate-cut expectations. That’s a direct tailwind for London-listed miners — Fresnillo, Endeavour Mining, and the mid-cap gold producers should open firm.
Copper rallied +2.06%, its best session in weeks, signaling that growth fears haven’t killed the industrial demand story. Glencore and Anglo American will benefit. WTI crude edged up +0.39% to $69 — modest, but enough to keep Shell and BP stable rather than a drag.
On the FX side, the yen strengthened sharply with USD/JPY falling -1.04% to 161, while AUD/USD climbed +0.79% to 0.695 — both consistent with a softer dollar. A weaker greenback helps eurozone exporters: Airbus, LVMH, and the German auto complex (BMW, Mercedes, Volkswagen) all price in dollars but report in euros. That’s a tailwind worth watching if the post-NFP dollar weakness extends into Friday.
What to Watch Today
- US early close and thin liquidity. Wall Street shuts at 1:00pm ET ahead of the July 4th holiday weekend. European afternoon trading will lose its usual US liquidity anchor — expect wider spreads and exaggerated moves in the final two hours of London trading.
- The tech-to-value rotation. Thursday’s European rally was broad-based, but the overnight Nasdaq sell-off (-0.80%) sets up a test: will European tech names (ASML, SAP, Infineon) give back gains while banks and commodity plays extend? The AEX’s flat close Thursday already hinted at this divergence.
- Fed commentary spillover. Trump publicly pressured Fed Governor Warsh on rates overnight, while Warsh said he sees “improving inflation.” Any further remarks before the US holiday could move European rate-sensitive sectors, particularly real estate and utilities.
- London miners and the copper bid. Copper’s +2.06% overnight move is the strongest signal for FTSE 100 outperformance today. If the move holds through Asian trading, Glencore, Rio Tinto, and Anglo American could push the FTSE toward a test of the 10,700 level.
Bottom Line
Europe enters Friday on the front foot after Thursday’s broad rally, but the overnight US tech sell-off introduces a split personality: cyclicals, banks, and commodity plays have the momentum, while tech-heavy corners of the market face headwinds. The setup favors a modest risk-on tone overall — the VIX at 16.1 and gold’s strength suggest calm conviction rather than panic. Thin US liquidity in the afternoon means morning price action will likely set the tone for the full session. Luna3 sees this as a day where sector selection matters more than direction.
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