Where Europe Closed Last Session

Friday’s session was a broad-based rip across the continent. The Euro STOXX 50 led the major benchmarks at +2.16% to 6,187.63, with peripheral Europe outperforming: Spain’s IBEX 35 surged +2.59% to 18,764.40 and Italy’s FTSE MIB gained +1.96% to 51,497. Both are rate-sensitive indices that respond fast when risk appetite returns.

Germany’s DAX 40 added +1.76% to 24,635.30, while France’s CAC 40 rose +1.83% to 8,350.87 — luxury and industrials both contributing. The Netherlands’ AEX climbed +1.70% to 1,081.18, relevant given ASML’s weight in the index. The UK’s FTSE 100 gained +1.63% to 10,471.70, a solid move but lagging the eurozone pack — sterling strength and the FTSE’s commodity lean explain some of the underperformance. Switzerland’s SMI added +1.32% to 13,708.02, the most defensive print of the group. Even Copenhagen’s OMX 25 joined at +0.79%.

The takeaway: every major European index closed at or near session highs. That kind of uniform breadth — southern Europe outperforming, defensives participating — is a momentum signal, not a sector rotation.

US Overnight Snapshot

Wall Street extended the risk-on tone into Friday’s close. The S&P 500 added +0.50% to 7,430, Nasdaq Composite rose +0.31% to 25,900, and the Russell 2000 outperformed at +0.87% to 293 — small-caps leading is a pro-cyclical signal that European industrials and banks tend to mirror.

The VIX collapsed -9.05% to 17.7, well below the 20 threshold that signals stress. That’s the cleanest volatility compression in weeks.

Sector standouts: Materials (XLB) led at +1.87%, a tailwind for European miners like Rio Tinto and Glencore. Financials (XLF) gained +1.37%, which should support eurozone bank names at the open. Technology (XLK) rose +0.87% — constructive for ASML and SAP, though the Nasdaq’s more modest headline gain suggests the megacap AI trade is digesting rather than accelerating.

Commodity + FX Watch

Oil is the story. WTI crude crashed -5.02% to $80.60 after reports that the US has reached a peace deal with Iran. If that holds, it’s structurally bearish for crude — and directly negative for Shell, BP, and TotalEnergies at the London and Paris opens. European airlines and consumer discretionary names are the flip-side beneficiaries.

Gold surged +2.69% to $4,330, a notable divergence from the risk-on equity tape. That combination — stocks up, gold up, oil down — often reflects geopolitical repricing rather than a pure growth bid. Copper gained +1.46% to $6.52, reinforcing the materials strength and supporting European mining shares.

On FX, AUD/USD firmed +0.39% to 0.708, a risk-on barometer. USD/JPY held flat at 160. European FX pairs weren’t in the data feed, but the broad dollar backdrop — weaker on Iran de-escalation — should give a mild lift to EUR/USD, which typically supports eurozone exporters like Airbus and LVMH.

What to Watch Today

• Iran deal follow-through. The oil crash and equity futures jump are priced off a headline. Watch for official details and whether OPEC+ responds — any walk-back reverses the crude move and flips the energy/airline trade.
• Fed Chair Warsh’s first meeting this week. Economists openly admit they don’t know his policy lean. European rate expectations and the euro will react to any forward guidance signals — this is the macro wildcard for the week.
• NVIDIA’s European AI push. The Nebius robotics partnership announcement puts a spotlight on European AI infrastructure plays. Watch sentiment around ASML, Infineon, and STMicroelectronics for any read-through.
• Credit markets. Pimco warned that defaults in debt markets are restarting. European high-yield spreads and peripheral sovereign spreads (Italy, Spain) are worth monitoring, especially after Friday’s aggressive risk-on move pushed valuations tighter.

Bottom Line

The carry-over setup for Monday’s European open is firmly risk-on: broad Friday rally, collapsing VIX, US futures jumping on the Iran deal, and materials leading. The oil crash is a net positive for the European consumer economy even as it pressures energy names. The main risk to the momentum read is headline reversal on Iran or a hawkish surprise from the new Fed chair later this week. Luna3 sees this as a session where dip-buyers have cover and energy shorts have a thesis — pick your lane early.

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