Where Europe Closed Last Session

European markets drifted into Monday’s close with modest gains that now look like the calm before the storm. The Euro STOXX 50 barely moved at 6,271.02 (+0.02%), while the DAX 40 added 0.19% to 25,114.25 and the CAC 40 outperformed at 8,364.65 (+0.31%). Italy’s FTSE MIB was the session’s standout at 52,809.00 (+0.37%), extending its run as the best-performing major eurozone index this month.

The FTSE 100 flatlined at 10,498.30 (+0.01%) — a telling sign that London’s energy-heavy benchmark hadn’t yet priced in the oil shock that developed overnight. Switzerland’s SMI gained 0.22% to 14,266.18, with defensive names doing their usual quiet work. The AEX in Amsterdam ticked up 0.11% to 1,085.40.

Spain’s IBEX 35 was the only major index in the red, shedding 0.25% to 19,335.70. Banks and tourism-linked names weighed on Madrid while the rest of the continent ground higher. The Copenhagen OMX 25 posted a fresh reading at 1,897.16 (+0.26%). Overall, a low-conviction session — but what happened in New York after European markets closed changes the picture entirely.

US Overnight Snapshot

Wall Street sold off hard. The S&P 500 dropped 0.79% and the Nasdaq Composite fell 1.55%, with the tech-heavy Nasdaq 100 ETF down 1.90%. The VIX jumped 14.17% to 17.2 — not panic territory, but the sharpest single-session spike in weeks and a clear signal that hedging demand is rising.

The sector split tells the story. Technology (XLK) cratered 2.42% after IBM’s profit warning flagged hardware weakness eating into margins. Energy (XLE) surged 3.01% as oil prices ripped higher on reports the US will blockade Iran’s entire coastline. Financials (XLF) added 0.65%, buoyed by earnings optimism. The Russell 2000 fell 0.85%, confirming this wasn’t just a large-cap tech problem — risk appetite contracted broadly.

For Europe, the read-across is direct: ASML, SAP, and Infineon will feel the Nasdaq drag at the open. Shell, BP, and TotalEnergies should gap higher on crude strength.

Commodity + FX Watch

Oil is the overnight headline. WTI crude climbed 0.50% in the session to $79.70, but the real move came after hours — reports of a full US naval blockade of Iran’s coastline pushed prices up as much as 9% to one-month highs. If that holds into the European open, every energy name on the FTSE 100 and Euro STOXX 50 gets a tailwind. Airlines and transport go the other direction — Ryanair, IAG, and Lufthansa face a direct hit from rising jet fuel costs.

Gold slipped 0.59% to around $4,040, an odd move given the geopolitical escalation — likely a dollar-strength effect as the greenback rallied alongside crude and bond yields. Copper edged up 0.26% to $6.35, a modest positive for mining names like Glencore and Rio Tinto on the FTSE 100.

The dollar’s strength overnight will weigh on euro-denominated exporters. European luxury and aerospace — LVMH, Hermès, Airbus — typically benefit from a weaker euro, but the risk-off tone may overwhelm any FX tailwind today.

What to Watch Today

• Oil price action at the European open. The Iran blockade story is still developing. If WTI holds above $85, expect Shell and BP to lead the FTSE 100 higher while the DAX underperforms on its lighter energy weighting and heavier industrial exposure.
• Tech damage assessment. ASML reports this month and any pre-earnings positioning will amplify the Nasdaq drag. Watch whether SAP and Siemens hold their 20-day moving averages — a break lower would signal the selling isn’t just a US import.
• Earnings bar is high. Wall Street has set aggressive expectations for the season, and IBM’s hardware warning suggests cracks in enterprise spending. European industrials with US revenue exposure — Schneider Electric, Atlas Copco — may face sympathy selling.
• VIX carry-over into European volatility. The VSTOXX typically tracks the VIX with a lag. A gap higher in European implied vol would compress multiples on rate-sensitive sectors like real estate and utilities.

Bottom Line

Europe opens Wednesday into a split setup: energy bulls versus everything else. The Iran escalation hands London’s oil majors a gift while punishing airlines and consumers. The tech selloff from New York will drag on continental heavyweights, and the VIX spike says the market is repricing risk, not just rotating. Luna3 sees a session that favors defensive positioning — energy longs, tech caution, and close attention to crude price levels that could turn a geopolitical premium into a demand-destruction problem.

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