Italy outperformed the continent Monday while Germany and Switzerland slipped — and overnight, US tech posted its strongest session in weeks, giving European chipmakers and software names a tailwind heading into Tuesday’s open.

Where Europe Closed Last Session

Monday’s session split Europe into two camps. Italy’s FTSE MIB led the continent higher, climbing 0.63% to 50,208 as bank and industrial names attracted bids. The Netherlands’ AEX added 0.37% to 1,044.99, buoyed by its tech-heavy composition. The FTSE 100 was essentially flat at 10,373.20, up just 0.05% — steady but directionless.

The other side of the ledger told a different story. Spain’s IBEX 35 dropped 0.66% to 18,223.10, the weakest performer on the board. The DAX 40 fell 0.58% to 24,616.22, with German industrials and automakers under pressure. Switzerland’s SMI shed 0.50% to 13,320.99 as defensive healthcare names (Roche, Novartis, Nestlé) failed to attract the usual safe-haven bid. France’s CAC 40 dipped 0.23% to 8,199.29 while the Euro STOXX 50 finished dead flat at 6,062.29 — a market waiting for a catalyst.

The divergence between Italy’s cyclical strength and Germany’s industrial weakness is worth monitoring. If the pattern holds, it suggests investors are rotating toward value and yield rather than growth-sensitive exporters.

US Overnight Snapshot

Wall Street delivered a clear risk-on signal. The Nasdaq Composite surged 0.86% while the S&P 500 added 0.30% to 7,410. The VIX collapsed 12.04% to 18.9, its sharpest single-session drop in weeks — a definitive unwind of fear.

Sector leadership was concentrated. Technology (XLK) jumped 2.15%, the standout by a wide margin. Energy (XLE) added 1.14%. On the other side, Materials (XLB) dropped 1.32% and Financials (XLF) fell 0.63%. The Russell 2000 gained 0.87%, confirming broad-based risk appetite beyond mega-cap tech.

For Europe, the tech surge matters directly. ASML, SAP, and Infineon should see a positive carry-over bid at the Amsterdam and Frankfurt opens. The financials weakness, however, could weigh on Eurozone bank names that led Monday’s Italian rally.

Commodity + FX Watch

Gold edged up 0.58% to $4,360, holding its safe-haven premium even as equities rallied — a sign that macro uncertainty hasn’t fully cleared. WTI crude fell 1.50% to $89.90, a headwind for Shell, BP, and TotalEnergies at the London and Paris opens. Copper gained 0.69% to $6.37, a modest positive for mining names on the FTSE 100 like Glencore and Rio Tinto.

In FX, the dollar weakened modestly — USD/JPY slipped 0.10% to 160.00 while AUD/USD firmed 0.24% to 0.706. A softer dollar generally supports euro-denominated exporters: think Airbus, LVMH, and ASML, whose revenues are partly dollar-priced. Watch EUR/USD and GBP/USD at the London open for confirmation of whether this dollar softness has legs.

What to Watch Today

• ASML volume in Amsterdam: Reports that Elon Musk is in direct talks with ASML for a $119 billion “TeraFab” chip plant will dominate the tape. The CEO called him “very serious.” Expect heavy pre-market interest and potential gap higher on Europe’s most valuable tech name.
• Oil-sensitive names under pressure: With WTI down 1.50%, Shell (.L), BP (.L), and TotalEnergies (.PA) face a soft open. Watch whether dip buyers step in or the energy sector extends Monday’s mixed performance.
• Tech carry-over breadth: US tech’s 2.15% session should lift SAP (.DE), Infineon (.DE), and STMicroelectronics (.PA) alongside ASML. The question is whether the bid extends beyond semiconductors into European software and digital names.
• Italian bank momentum: FTSE MIB’s 0.63% outperformance Monday was driven by cyclicals and banks. If US financials’ 0.63% decline bleeds into European sentiment, that Italian strength could fade quickly — a test of whether the rotation was conviction or a one-day trade.

Bottom Line

The overnight setup leans risk-on for European equities. A VIX collapse to 18.9, a tech-led US rally, and a softer dollar all favor a positive open — particularly for semiconductor and growth names. The ASML headline alone could set the tone for Amsterdam and Frankfurt. The drag comes from oil and financials: energy names face a headwind from WTI’s 1.50% decline, and Monday’s Italian bank rally will be tested against US financial weakness. On balance, Luna3 sees the carry-over favoring buyers at the open, with sector selection doing the heavy lifting.

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