London closed Thursday at its best level in weeks while the DAX drifted lower — and then Wall Street’s tech names got hit hard overnight, with the Nasdaq dropping 1.47% as money rotated into banks, energy, and materials. The question for Friday’s European open: does the FTSE’s relative strength hold, and how much pain does the continent’s tech sector absorb?

Where Europe Closed Last Session

Thursday’s session split along a clear UK-versus-continent line. The FTSE 100 rose 0.54% to 10,572.20, its best close of the week, driven by strength in commodity producers and banks that benefited from rising oil-sector sentiment and solid earnings momentum from US financials filtering through. The AEX in Amsterdam gained 0.41% to 1,102.38, keeping pace with London.

The Euro STOXX 50 managed a modest 0.29% gain to 6,283.61, but beneath the headline the picture was mixed. The DAX 40 fell 0.34% to 24,915.49, weighed down by its heavy tech and industrial exposure — SAP and Infineon both traded soft as semiconductor sentiment weakened into the close. The CAC 40 was essentially flat at 8,377.86, down just 0.05%, with luxury names treading water.

Peripheral markets were quiet. The IBEX 35 added 0.15%, the FTSE MIB slipped 0.07%, and the SMI in Zurich lost 0.28% to 14,267.19 as defensive healthcare names like Roche and Novartis saw mild profit-taking. The OMX Copenhagen dropped 0.42%, underperforming the region. The takeaway: markets with cyclical and commodity exposure outperformed, while tech-heavy and defensive indices lagged.

US Overnight Snapshot

Wall Street delivered a clear rotation signal. The S&P 500 fell 0.51% while the Nasdaq Composite dropped 1.47% — the widest gap between the two in recent sessions. The Technology sector (XLK) bore the brunt at -2.24%, with headlines flagging Micron as “the most important stock in the market” and Nvidia still drawing outsized attention despite bullish analyst targets.

The flip side was telling. Financials (XLF) rose 0.34% as bank earnings continued to impress — headlines noted that “banks’ blowout earnings steal the spotlight from Big Tech.” Energy (XLE) gained 0.92% on tighter global supply forecasts, and Materials (XLB) added 0.77%. The VIX jumped 6.76% to 16.7 — elevated but still below the 20 threshold that signals real stress.

For Europe, the read-across is direct: ASML, SAP, and Infineon will face selling pressure at the open, mirroring the Nasdaq weakness. But European banks — BNP Paribas, Deutsche Bank, Barclays — and energy majors like Shell and TotalEnergies should find support from the rotation trade.

Commodity + FX Watch

Gold edged up 0.41%, holding near recent highs as the tech selloff pushed some capital toward safety. Crude oil dipped 0.44% to $78.60 despite headlines pointing to tighter global supplies and hot US weather boosting nat-gas — a mixed setup for Shell, BP, and TotalEnergies that leans mildly supportive. Copper fell 1.02%, the sharpest commodity move overnight, which could weigh on mining names like Glencore and Anglo American after yesterday’s FTSE strength.

On FX, AUD/USD slipped 0.28% and USD/JPY ticked up 0.10%, signalling mild dollar strength. EUR/USD softness — implied by the broader dollar bid — would give a tailwind to eurozone exporters like LVMH, Airbus, and Siemens. The Swiss franc’s relative firmness (SMI -0.28% yesterday while the franc held) suggests defensive positioning hasn’t fully unwound in Zurich.

What to Watch Today

• Tech open on the DAX and AEX: ASML, SAP, and Infineon will price in the Nasdaq’s 1.47% drop and XLK’s 2.24% loss. Watch whether European tech finds a floor or extends the US selling — the first 30 minutes of Frankfurt trading will set the tone for risk appetite across the continent.
• Bank earnings momentum: US financials posted blowout numbers this week. European banks (Barclays, BNP Paribas, UniCredit) report soon — if traders front-run the same beat-and-raise pattern, financials could carry the session.
• Copper’s drag on UK miners: With copper down 1.02% overnight, the FTSE 100’s Thursday outperformance faces a headwind. Glencore, Anglo American, and Rio Tinto may give back gains, testing whether London can hold its lead over the continent.
• OECD global minimum tax headlines: The OECD confirmed the global minimum tax boosted revenue without triggering job losses — watch for policy reaction in Dublin and Amsterdam, where tax-sensitive multinationals are listed.

Bottom Line

Friday’s European session opens into a clear rotation backdrop: tech under pressure, banks and energy in favour, and the FTSE 100’s commodity-heavy tilt looking like the right side of the trade for the second straight day. The Nasdaq’s 1.47% overnight drop will sting the DAX at the open, but broad risk hasn’t broken — the VIX at 16.7 is uncomfortable, not panicked. Luna3 sees a session where stock-pickers matter more than index direction, with value and cyclical names likely outperforming growth across the region.

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