Where Europe Closed Last Session

European markets ended their most recent session split along a clear fault line: continental bourses edged higher while the UK and northern periphery faded.

The CAC 40 led with a +0.28% gain to 8,509.64, helped by luxury and industrial names catching a bid. The Euro STOXX 50 followed at +0.21% to 6,358.01, and the DAX 40 was essentially flat at +0.07% to 25,629.24 — enough to hold ground but not enough to suggest conviction. Southern Europe tagged along: IBEX 35 +0.13% and FTSE MIB +0.13%, both grinding higher without a clear catalyst.

The red side told a sharper story. The AEX dropped 0.50% to 1,099.18 — the session’s worst performer among major indices — with Amsterdam’s heavy semiconductor and consumer-goods weighting dragging it lower. The SMI fell 0.32% to 14,346.14 as Swiss defensives gave back gains. And the FTSE 100 slipped 0.27% to 10,868.10, weighed by energy majors and commodity-linked names that were already pricing in softer oil before the US session confirmed it.

The takeaway: eurozone core held together, but anything commodity-exposed or rate-sensitive was already under pressure heading into the break.

US Overnight Snapshot

Wall Street delivered a clean risk-on session. The S&P 500 rose 0.70% to 7,490 and the Nasdaq Composite gained 1.00%, driven by AI-linked momentum after Palantir’s earnings beat showed turbocharged growth. Microsoft extended a run not seen in 26 years, reinforcing the theme that Wall Street is now rewarding AI results over AI spending promises.

The VIX dropped 6.44% to 16 — firmly in complacent territory. That’s a green light for European risk appetite at the open, particularly for high-beta names in tech and industrials.

The divergence worth watching: Russell 2000 fell 0.48% while mega-caps rallied, and Materials (XLB) dropped 2.34% despite copper strength. That breadth gap suggests the rally is narrow. For Europe, the Nasdaq strength should lift ASML and SAP early, but the small-cap weakness and materials drag may spill into mid-cap industrials on the DAX and CAC.

Commodity + FX Watch

Oil is the headline: WTI crude crashed 4.67% to $80.70, the kind of single-session drop that reprices the entire European energy complex. Shell, BP, and TotalEnergies will open under pressure, and the FTSE 100 — already soft last session — faces an early drag from its heavy energy weighting.

Gold surged 1.70% past $4,120, suggesting macro hedging demand is alive despite the equity rally. That’s supportive for London-listed gold miners like Fresnillo and Endeavour. Copper rallied 2.39%, a positive read for Glencore and the industrial metals complex — though the XLB selloff in the US complicates that signal.

On FX, Treasury Secretary Bessent’s comments about readiness to repeat joint yen intervention and push for a bigger Fed backstop are the overnight wildcard. USD/JPY held at 158 (+0.06%), but any follow-through dollar weakness would benefit euro-denominated exporters — Airbus, LVMH, and Siemens all get a tailwind from a softer dollar. AUD/USD slipped 0.41%, flagging some risk-off undercurrent in commodity currencies despite the copper bid.

What to Watch Today

• European energy repricing: A 4.67% oil drop is too large for Shell, BP, and TotalEnergies to shrug off. Watch whether FTSE 100 energy names gap below last session’s lows — if they hold, the broader UK index could stabilise; if they don’t, the FTSE faces a test of 10,800.
• ASML and SAP open: Nasdaq’s 1.00% gain and the Palantir-led AI rally should provide early support for Europe’s two largest tech names. A strong open for ASML would help the AEX recover from its 0.50% drop last session.
• Bessent FX comments: The yen intervention readiness headline adds a layer of FX uncertainty. If EUR/USD catches a bid on dollar softness, export-heavy DAX and CAC names benefit — but Swiss franc strength could pressure the SMI further.
• Gold miners vs. oil majors: With gold up 1.70% and oil down 4.67%, the London market will see a rare intra-session rotation from energy into precious metals. Track the Fresnillo-to-Shell ratio as a real-time read on how the FTSE is absorbing the commodity divergence.

Bottom Line

The US session handed Europe a mixed setup: equity risk appetite is strong, volatility is low, and AI momentum gives tech a clear tailwind — but the oil crash is a direct hit to the FTSE 100’s largest sector, and narrow US breadth suggests the rally isn’t as broad as the headline numbers imply. European markets should open modestly higher on the continent and flat-to-lower in London, with energy names doing the heavy lifting on the downside. Luna3 sees today as a stock-picker’s session: long tech and gold exposure, cautious on anything tied to crude.

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