Where Europe Closed Last Session

Wednesday’s session delivered green across every major European benchmark, but the gains were far from uniform. The AEX in Amsterdam led the board at +1.06%, followed by Italy’s FTSE MIB at +0.95% and Spain’s IBEX 35 at +0.81% — Southern Europe and the Netherlands doing the heavy lifting.

The Euro STOXX 50 rose 0.78%, a solid broad-market print that masked a curious divergence underneath. France’s CAC 40 gained 0.48%, matching the FTSE 100’s +0.48% move in London. Switzerland’s SMI added 0.49%, and the OMX Copenhagen 25 ticked up 0.58%.

The outlier was Germany. The DAX 40 managed just +0.06% — essentially flat while every peer index posted gains between half a percent and a full percent. That underperformance stands out given that German telecom M&A speculation is heating up (Deutsche Telekom’s leadership is reportedly plotting a blockbuster merger), yet the broader index couldn’t catch a bid. Watch whether the overnight US tech surge pulls the DAX out of its funk today.

US Overnight Snapshot

Wall Street delivered one of the strongest sessions in weeks. The Nasdaq Composite surged 2.54%, the S&P 500 climbed 1.75%, and the Russell 2000 jumped 2.96% — small caps outperforming is a risk-appetite signal that matters for European cyclicals.

Technology led at +3.73% (XLK), which will flow directly into ASML, SAP, and Infineon at the European open. Materials gained 3.27%, a tailwind for miners like Rio Tinto and Glencore on the FTSE 100. Financials added 0.75% — a modest gain but enough to keep the bid alive under Eurozone banks.

The VIX collapsed 12.51% to 19.4, dropping back below the 20 threshold. That’s the market exhaling. The catalyst: US CPI data came in above 4%, but the dollar slipped anyway — the market read it as confirmation the Fed won’t hike, and risk assets ripped higher on the dovish interpretation. Energy was the lone red sector at -1.94%, weighed by oil’s pullback despite Iran headlines.

Commodity + FX Watch

Gold jumped 2.64% to around $4,200 — inflation hedging and geopolitical premium both at work. That’s supportive for European gold miners like Fresnillo on the FTSE 100.

WTI crude fell 1.94% to $86 despite President Trump pledging immediate strikes on Iran. The disconnect suggests the market is pricing supply disruption risk as low-probability for now, but the headline risk is real. If rhetoric escalates, Shell, BP, and TotalEnergies will be the first movers. Energy’s -1.94% drag on Wall Street could cap any opening pop for the FTSE’s oil majors.

Copper gained 1.94%, a positive read for industrial demand and European materials names. The dollar’s broad weakness — AUD/USD rose 0.58%, USD/JPY dipped 0.13% — implies EUR/USD likely firmed overnight. A weaker dollar helps euro-denominated exporters like Airbus and LVMH on the margin, though it’s a headwind for dollar-earning revenues when translated back.

What to Watch Today

• DAX catch-up trade: Germany was the clear laggard on Wednesday (+0.06% vs. peers at +0.5% to +1.0%). With US tech up 3.73% overnight, SAP and Infineon may force the DAX to close that gap at the open — or the underperformance deepens into a signal.
• Iran escalation watch: Trump’s strike pledge against Iran is the wild card. Defense names (BAE Systems, Rheinmetall, Leonardo) could see fresh bids, while the energy complex stays volatile. Any concrete military action overnight would reprice oil and European risk broadly.
• UK data and FTSE positioning: With the FTSE 100 at 10,303 — sitting near its highs — miners stand to benefit from copper’s overnight strength while oil majors may drag. The FTSE’s dual personality (commodities vs. defensives) will be on full display.
• Inflation spillover to rate expectations: US CPI above 4% keeps the global rates conversation alive. Watch European government bond yields at the open — any repricing of ECB expectations will hit rate-sensitive sectors like real estate and utilities first.

Bottom Line

The setup for Friday’s European open is firmly risk-on. A surging US session, a VIX back below 20, and broad dollar weakness all argue for continuation of Wednesday’s green tape. The main risk is geopolitical — Iran strike rhetoric could flip sentiment in minutes if it moves from words to action. For Luna3 readers tracking European markets, the cleanest read is the DAX divergence: either it catches up to its peers today, or something deeper is wrong in Germany.

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