Where Europe Closed Last Session

Wednesday was a washout across the continent. Spain’s IBEX 35 led the damage at -2.73%, followed closely by the DAX 40 at -2.23% and the CAC 40 at -2.18%. The Euro STOXX 50 dropped -1.82%, confirming the selloff was eurozone-wide rather than isolated to one market.

The FTSE 100 fell -1.66%, underperforming its usual defensive reputation. The SMI lost -1.30% as even Swiss defensives failed to hold. Italy’s FTSE MIB declined -1.22%, a relatively modest loss given the broader carnage. The AEX stood out as the most resilient major index at just -0.26% — ASML’s weight likely cushioned the Dutch benchmark as tech held up better than cyclicals globally.

Copenhagen’s OMX 25 was the sole green print at +0.42%, a reminder that Nordic healthcare and shipping names sometimes decouple from eurozone macro stress. The pattern across the rest of Europe was clear: anything tied to trade flows, energy costs, or rate sensitivity got hit. Banks, industrials, and commodity-linked names bore the worst of it. The IBEX’s outsized loss reflects Spain’s sensitivity to energy import costs — a theme that intensified overnight.

US Overnight Snapshot

Wall Street closed mixed but the internals told a sharper story. The S&P 500 slipped -0.28% while the Nasdaq Composite managed +0.20%, propped up by a +1.24% gain in the technology sector. The Russell 2000 dropped -0.91%, showing small-cap risk appetite evaporating.

The real signal sat in sector rotation. Financials fell -1.93% — a direct read-through for European banks at the open. Materials collapsed -2.62%, the session’s worst performer, which will weigh on mining-heavy FTSE constituents like Rio Tinto and Glencore. Energy gained +1.76% as Strait of Hormuz headlines pushed crude higher after hours. The VIX rose +4.77% to 16.9 — not panic territory, but the sharpest single-session jump in weeks, and enough to signal hedging demand is picking up.

For Europe, the tech strength offers a narrow lifeline for SAP and ASML. Everything else in the US session points to continued pressure on cyclicals and financials when London and Frankfurt open.

Commodity + FX Watch

Gold climbed +1.04% above $4,100, reinforcing the safe-haven bid as geopolitical risk reprices. That’s supportive for Swiss gold refiners and London-listed precious metals miners. WTI oil edged down -0.29% in the regular session but after-hours headlines about additional US strikes on Iran and the Strait of Hormuz returning to “full-conflict conditions” suggest the energy complex will gap higher at the European open — watch Shell, BP, and TotalEnergies closely.

Copper surged +2.36%, its strongest move in weeks, which should give a lift to Antofagasta and Boliden if the bid holds. The dollar edged higher on crude strength and weak equities — a headwind for euro-denominated exporters like Airbus and LVMH. AUD/USD gained +0.29% to 0.694, reflecting the commodity-linked currency catching a bid from metals strength. USD/JPY barely moved at 162, keeping the yen carry trade intact and offering no relief for Japanese-competitive European automakers.

What to Watch Today

• Strait of Hormuz escalation: Headlines overnight describe “full-conflict conditions” and additional US military strikes on Iran. European energy names will reprice at the open — BP, Shell, TotalEnergies, and Equinor are the direct plays, but the second-order hit lands on airlines (fuel costs) and European industrials (input inflation). This is the single biggest variable for Thursday’s session.
• Bank of America’s “two economies” warning: The research note flagging a split US consumer adds to the case for defensive positioning. European luxury (LVMH, Hermès, Kering) depends on top-end US spending holding — if that thesis wobbles, Paris will feel it.
• FTSE mining response to copper’s +2.36% overnight move: Rio Tinto, Anglo American, and Glencore could outperform the broader FTSE if the copper bid holds through Asian trading. Materials were the worst US sector at -2.62%, but that was driven by domestic names — the London-listed miners trade on global commodity pricing, not US construction sentiment.
• AEX resilience test: The Dutch index lost just -0.26% Wednesday while peers dropped 1.5-2.7%. If ASML and Adyen hold up again on Thursday, it confirms a quality-tech premium that could widen further in a risk-off tape.

Bottom Line

Thursday’s European open looks like a split session: energy names bid higher on Hormuz escalation, defensives and gold miners catching safe-haven flows, and everything in between — banks, industrials, luxury — under continued pressure. The US session offered no all-clear, with financials weak, volatility rising, and only big tech holding the line. Luna3 sees the risk-off lean persisting until the geopolitical premium either gets absorbed or escalates further — and the headlines overnight suggest we’re not at the absorption stage yet.

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