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- Swiss SMI led European losses with a sharp -1.75% drop; broad weakness hit FTSE 100, DAX, and IBEX ahead of Tuesday's open
- US tech surged +2.48% overnight on AI infrastructure momentum — positive read-through for ASML, SAP, and Infineon at the open
- Gold rallied nearly 2% while oil slipped, setting up a mixed commodity backdrop for Shell, BP, and European miners
Switzerland’s SMI posted its worst session in weeks while the rest of Europe bled red — but overnight, US tech ripped higher on an AI spending spree, handing European chipmakers and software names a lifeline heading into Tuesday’s open.
Where Europe Closed Last Session
Monday was a broad sell-off with no major index spared. The SMI stood out as the session’s clear laggard, dropping 1.75% as Swiss defensives — typically a haven trade — saw heavy profit-taking. Nestlé, Roche, and Novartis all sit in the index’s top weights, and the scale of the move suggests institutional rebalancing rather than a single-name catalyst.
Spain’s IBEX 35 fell 0.97%, with banking heavyweights Santander and BBVA under pressure alongside broader eurozone rate sensitivity. Italy’s FTSE MIB lost 0.52%, tracking the southern European bank theme lower. The FTSE 100 dropped 0.68%, weighed by commodity names and a soft pound, while the DAX shed 0.40% and the CAC 40 gave back 0.45%. The Euro STOXX 50 held up slightly better at -0.26%, suggesting large-cap eurozone names absorbed the selling more evenly than peripheral markets.
The lone bright spot was the AEX in Amsterdam, which eked out a 0.11% gain — likely supported by ASML holding firm ahead of the US tech rally that materialised later in the session. Copenhagen’s OMX 25 also printed a small gain of 0.32%.
US Overnight Snapshot
Wall Street delivered a split session. The S&P 500 added 0.26% and the Nasdaq Composite gained 0.42%, but the real story was under the hood: the Technology sector (XLK) surged 2.48%, its strongest day in weeks. The catalyst trail runs through Alphabet’s $80 billion AI infrastructure commitment, HPE’s networking blowout earnings, Micron blasting past $1,000, and Barclays flagging SanDisk’s new AI contracts as potentially transformative for the memory industry. That AI capex narrative is a direct read-through for European semiconductor and equipment names — ASML, Infineon, BE Semiconductor, and STMicroelectronics should see bid interest at the open.
Energy (XLE) also rallied 1.79%, a move that could support Shell and BP early on. But the Russell 2000 fell 0.50% and Financials dipped 0.29%, signalling that risk appetite was narrow, not broad. The VIX ticked up 4.77% to 16 — still comfortably below the 20 stress threshold, but the direction suggests hedging activity is picking up.
Commodity + FX Watch
Gold jumped 1.95%, pushing toward the $4,560 level as safe-haven demand reasserted. The Iran conflict’s ongoing disruption to energy trade routes — now 90 days in per overnight reporting — keeps geopolitical risk premia elevated. That backdrop supports European gold miners and defence names.
WTI oil slipped 0.59% despite the Middle East tension, settling near $91.60. That mild pullback could weigh on Shell and BP after Monday’s already-soft FTSE session. Copper gained 1.42%, a positive signal for European industrials and miners like Glencore and Rio Tinto’s London listing.
On the FX side, USD/JPY pushed higher by 0.22% to 160, reflecting continued dollar strength. A firmer dollar typically pressures euro-denominated exporters — Airbus, LVMH, and SAP earn heavily in USD, so the translation effect cuts both ways depending on where you sit in the supply chain.
What to Watch Today
- European chip names at the open: ASML, Infineon, and STMicroelectronics will price in the US tech surge. The AI capex narrative from Alphabet, Micron, and HPE is the clearest overnight catalyst for European equities — watch whether the bid sustains past the first 30 minutes or fades into profit-taking.
- Swiss rebound potential: Monday’s 1.75% SMI drop was outsized relative to peers. If there’s no fresh fundamental driver, a technical bounce in Nestlé and Roche could materialise. Watch for early flow direction in Zurich.
- Iran energy risk: Three months into the conflict, energy market disruption is now structural, not episodic. European energy stocks, defence contractors, and shipping names (Maersk, Hapag-Lloyd) remain in play on any headline escalation.
- Leopold Aschenbrenner’s chip short: The fund manager disclosed bearish positions on SMH and NVIDIA overnight. If European chip bulls are leaning long on the AI capex story, this is the counter-narrative to track — any follow-through selling in US afterhours could cool the open.
Bottom Line
The setup heading into Tuesday is cautiously constructive for European tech and industrials but less clear for banks and defensives. Monday’s broad weakness clears some froth, and the US tech surge hands semiconductor names a clean bid at the open. The wider market tone depends on whether that narrow AI-driven strength broadens or stays confined to a handful of names — and at Luna3, we’ll be watching early volume in ASML and the SMI’s first-hour direction for the answer.
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