The DAX closed out the first half of 2026 with a 1.50% surge while the FTSE 100 barely moved — and overnight, US tech posted its strongest session in weeks. European bulls have a clean setup heading into Wednesday’s open.

Where Europe Closed Last Session

Tuesday’s session drew a sharp line between eurozone risk appetite and defensive caution elsewhere. The DAX 40 jumped 1.50% to 24,995.81, just five points shy of the 25,000 level that’s acted as a ceiling. The Euro STOXX 50 matched that energy with a 1.55% gain to 6,328.09 — the strongest single-session move for the broad eurozone benchmark in over a week.

The rally was broad across the continent. The AEX climbed 1.39%, the FTSE MIB added 1.01%, and the IBEX 35 rose 0.44%. The OMX Copenhagen 25 gained 0.70%, lifted by its pharma and shipping heavyweights. France’s CAC 40 advanced 0.44% to 8,403.99 — a solid move, though lagging its eurozone peers.

The outliers told their own story. The FTSE 100 managed just +0.12% to 10,497.10, weighed down by energy and mining names that couldn’t keep pace with the tech-driven eurozone rally. Switzerland’s SMI was the session’s only loser at -0.21%, with its defensive pharma-heavy composition working against it on a clear risk-on day.

US Overnight Snapshot

Wall Street delivered a strong handoff. The S&P 500 rose 0.79% while the Nasdaq Composite surged 1.52%, driven by a 2.76% rally in the technology sector (XLK). That kind of tech leadership translates directly to European price action — ASML, SAP, and Infineon typically track Nasdaq momentum at the open, and a near-3% move in US tech gives them room to run.

The VIX dropped 6.80% to 16.5, well below the 20 threshold that signals stress. That’s the volatility index giving a green light for risk positioning. The Russell 2000 added 0.50%, confirming the rally wasn’t just mega-cap driven.

On the weak side, financials (XLF) slipped 0.20% and energy (XLE) fell 0.88%. European banks may open mixed despite the broader risk-on tone, and Shell, BP, and TotalEnergies will feel the energy sector drag.

Commodity + FX Watch

Gold dropped 0.98% toward the $3,980 level — classic behaviour when equities rally and volatility compresses. That’s a mild headwind for Swiss gold refiners and London-listed miners like Fresnillo.

WTI crude was essentially flat at $69.50, down just 0.06%, though headlines about reduced tanker flows through the Strait of Hormuz could inject a supply-side bid during European hours. Shell and BP should open roughly in line, with the energy drag coming more from sector rotation than commodity weakness.

Copper fell 0.82%, which will weigh on mining-heavy FTSE 100 names like Glencore and Anglo American. The AUD/USD firmed 0.16% to 0.689, reflecting the modest risk-on lean. USD/JPY pushed to 163 (+0.46%), extending yen weakness — a dynamic that keeps pressure on the Bank of Japan but has limited direct European impact beyond Japanese cross-listed flows.

What to Watch Today

• DAX 25,000 test: The index closed five points short of a psychologically significant level. A clean break today — supported by the US tech tailwind — could trigger momentum buying and pull the Euro STOXX 50 higher with it.
• Eurozone manufacturing PMI (final June): The final reading drops this morning. Any upward revision from the flash estimate would reinforce the risk-on tone; a downward surprise could stall the DAX rally before it tests 25,000.
• Chip sector focus: Headlines flagging a new threat to the chip rally at its highest level since 2015 deserve attention. ASML is the bellwether — if the Nasdaq tech rally doesn’t lift it today, that’s a signal worth watching.
• H1 2026 rebalancing flows: Today marks the first session of the second half. Record ETF inflows during H1 (per overnight headlines) may trigger window-dressing and rebalancing trades, especially in large-cap eurozone names that outperformed in June.

Bottom Line

The setup favors a risk-on open across European markets. A 1.5% Nasdaq rally, collapsing VIX, and strong eurozone momentum from Tuesday’s close all point the same direction. The DAX has a legitimate shot at 25,000 today, and the broad eurozone trade looks better than the UK or Swiss defensives. Luna3 sees the carry-over tone as constructive — the question is whether final PMI data and the start of H2 rebalancing add fuel or friction.

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