Where Europe Closed Last Session

Thursday’s session split Europe into two camps: a fired-up continent and a cautious Anglo-Swiss bloc. The Euro STOXX 50 climbed 1.53%, its strongest single-day gain in weeks, with southern Europe leading the charge. Spain’s IBEX 35 topped the board at +1.78%, Italy’s FTSE MIB added 1.28%, and the CAC 40 rose 0.92% in Paris. Germany’s DAX 40 gained 0.60%, and the AEX in Amsterdam pushed up 1.06%.

London missed the party. The FTSE 100 slipped 0.10% to 10,897, weighed down by commodity-linked heavyweights as oil prices softened through the session. Switzerland’s SMI was the clear laggard, falling 0.65% — defensive names like Nestlé and Roche tend to underperform when risk appetite picks up elsewhere, and that’s exactly what happened. Copenhagen’s OMX 25 edged up 0.20%, quiet by comparison.

The takeaway: Eurozone risk assets — banks, industrials, cyclicals — were already in buy mode before the US session even started. The question now is whether Friday’s open can extend that momentum with an even stronger overnight tailwind behind it.

US Overnight Snapshot

Wall Street delivered one of its best sessions of the summer. The S&P 500 surged 1.66%, but the real story was tech: the Nasdaq Composite jumped 2.78% and the technology sector (XLK) exploded 5.50% higher. The catalyst was the Fed’s July rate decision — rates held steady, and while Chair Warsh reiterated the Fed “will not waver” on inflation, markets read the hold as confirmation that the hiking cycle is done. VIX collapsed 17% to 17.1, a clear risk-on signal.

The Russell 2000 added 1.39%, showing the rally had breadth beyond mega-cap tech. Financials gained a modest 0.56%. For Europe, the tech surge matters most — it should lift ASML, SAP, and Infineon at the open. The collapse in VIX and broad-based US strength also favors European banks and cyclicals that were already rallying into Thursday’s close.

Commodity + FX Watch

Gold rose 0.87% to around $4,140, holding its bid even as risk appetite surged — a sign that real-rate expectations may be shifting post-Fed. Copper added 0.83%, a positive read-through for European miners like Glencore and Rio Tinto on the LSE.

WTI crude dropped 1.89% to $82, which will weigh on Shell and BP at the London open and explains part of the FTSE 100’s underperformance Thursday. Natural gas is rebounding ahead of August contract expiration, worth watching for European utility names.

In FX, the dollar weakened broadly: USD/JPY fell 1.82% as the yen strengthened sharply, and AUD/USD gained 1.10%. A softer dollar typically supports EUR/USD, which would give a marginal tailwind to eurozone exporters like Airbus and LVMH. The Swiss franc’s relative strength Thursday aligns with the SMI’s defensive posture — watch whether that unwinds if risk-on momentum carries into Friday.

What to Watch Today

• European tech at the open. With US tech up 5.50% overnight, ASML, SAP, and Infineon should gap higher. The implosion of the “Situational Awareness” hedge fund — a high-profile AI-focused fund — has Wall Street betting the AI pullback is over. If that sentiment crosses the Atlantic, European semis and software names will lead.
• Eurozone flash CPI and GDP data. July 31 is a key date for eurozone macro prints. Any downside surprise in inflation strengthens the case for ECB easing and would extend the Euro STOXX 50 rally. An upside miss reintroduces rate uncertainty and could cap gains despite the US tailwind.
• Oil-sensitive FTSE names. Shell, BP, and the broader FTSE energy complex face a tug-of-war between the nearly 2% drop in WTI and the broader risk-on backdrop. If crude stabilizes, the FTSE could finally participate in the continental rally. If oil keeps sliding, expect London to lag again.
• Aston Martin (LSE). Headlines flagged that the luxury carmaker’s recovery “still needs fuel.” With the stock already under pressure, watch for any volume spike at the open — it could draw short-covering interest if the broader risk-on tone lifts UK mid-caps.

Bottom Line

The setup for Friday’s European session is about as clean as it gets for bulls. Continental indices were already rallying before a massive US tech-led session and a 17% VIX drop added overnight confirmation. The Fed hold removes near-term rate anxiety, and the dollar weakness gives eurozone exporters an extra edge. The one drag is oil — sub-$82 WTI keeps the FTSE 100 on the back foot while the rest of Europe pushes higher. Luna3 sees this as a risk-on open with the DAX and Euro STOXX 50 positioned to extend Thursday’s gains, but keep an eye on any eurozone macro surprises that could alter the script.

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