- SMI led Europe higher with a +0.61% gain while DAX slipped -0.29% — Swiss defensives outperformed as the continent traded mixed ahead of Thursday's open
- Nasdaq fell -0.83% overnight on AI spending concerns at SpaceX and Figma, setting up pressure on European tech names ASML and SAP
- Gold surged +1.61% to fresh highs near $4,310 while Bessent's comments on a potential Iran deal kept oil contained — watch Shell and BP positioning
Where Europe Closed Last Session
Wednesday’s session split Europe into two camps: Swiss defensives versus everything else. The SMI climbed +0.61%, the session’s clear winner, as investors rotated into healthcare and consumer staples names that benefit from a stronger franc and lower rate expectations. Nestlé, Roche, and Novartis all sit in the SMI’s top weightings, and the defensive bid was visible.
The rest of the continent traded in a narrow band. The FTSE 100 edged up +0.08% to 10,888, holding near recent highs but lacking conviction. Spain’s IBEX 35 added +0.17% to 20,057, while France’s CAC 40 was essentially flat at +0.03%.
On the softer side, the DAX 40 slipped -0.29% to 26,126, dragged by its heavy tech and industrial weightings. The Euro STOXX 50 fell -0.15% to 6,477, confirming the broader eurozone weakness. Italy’s FTSE MIB lost -0.18%, the AEX dipped -0.10%, and Copenhagen’s OMX 25 shed -0.31%. The pattern was clear: risk appetite was thin, and money preferred safety over cyclical exposure heading into Thursday.
US Overnight Snapshot
Wall Street didn’t offer much encouragement. The S&P 500 slipped -0.17% while the Nasdaq Composite dropped -0.83%, weighed down by AI spending anxiety after SpaceX’s earnings spooked investors with the scale of its AI investment and Figma’s stock fell on steep cost projections. The Russell 2000 lost -0.64%, suggesting the selling wasn’t confined to mega-cap tech.
Sector action told a clearer story. Energy was the worst performer at -2.07% after Treasury Secretary Bessent suggested an Iran deal could be close, which would eventually add supply. Materials rallied +1.23%, and Financials gained +0.21%. Technology dropped -0.53%. The Nasdaq weakness will pressure European tech at the open — ASML, SAP, and Infineon typically track overnight Nasdaq sentiment closely, and a -0.83% print gives DAX bears early ammunition.
The VIX fell -4.18% to 15.8, which is the one reassuring signal. Markets sold off without panic.
Commodity + FX Watch
Gold surged +1.61% to approximately $4,310, extending its run as the safe-haven bid strengthens. European gold miners like Fresnillo on the FTSE should see support at the open.
WTI oil rose modestly at +0.39% to $75.50, a contained move given the Iran deal headlines. If those talks gain traction, Shell, BP, and TotalEnergies face headline risk in coming sessions. Copper was flat at +0.02%, offering no strong read for European industrials.
On currencies, AUD/USD slipped -0.03% and USD/JPY ticked up +0.08% — both minor moves. The dollar weakened broadly against European currencies after the equity sell-off and lower crude, which should give a mild tailwind to euro-denominated exporters like Airbus and LVMH. Watch EUR/USD direction at the London open for confirmation.
What to Watch Today
- European tech repricing: The Nasdaq’s -0.83% drop on AI spending fears puts ASML, SAP, and Infineon in focus. If the DAX opens below 26,100, the index could test lower support levels that have held since late July.
- Iran deal implications for energy: Bessent’s comments will keep BP, Shell, and TotalEnergies on watch. Any further diplomatic signals during European hours could accelerate selling in the sector — or trigger a relief rally if talks stall.
- Swiss strength continuation: The SMI’s +0.61% outperformance was the biggest single-day gap versus the Euro STOXX 50 in recent sessions. Watch whether that defensive rotation extends or fades as traders digest the US overnight tone.
- Deutsche Bank’s Palantir upgrade: Deutsche Bank upgraded Palantir after earnings, a sign that at least one major European bank sees AI spending as a positive. This could temper some of the negative AI sentiment flowing from the US session into European trading desks.
Bottom Line
Thursday’s European open inherits a mixed setup: mild US equity weakness, falling volatility, and a gold bid that signals caution without fear. The lean is slightly defensive — the SMI’s outperformance and Nasdaq’s tech-led decline suggest European traders will favour quality over cyclicals early in the session. Luna3 sees the Iran deal talk as the wildcard that could shift energy names sharply in either direction, so position sizing matters more than direction today.
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