Where Europe Closed Last Session

Tuesday’s session was green across the board. The Euro STOXX 50 led the charge, climbing 0.94% to 6,285.63 — its strongest single-day gain in over a week. Spain’s IBEX 35 and Italy’s FTSE MIB weren’t far behind, rising 0.90% and 0.81% respectively, with Southern European banks catching a bid alongside improving risk appetite.

Germany’s DAX 40 added 0.66% to close at 25,011.35, holding above the psychologically important 25,000 level. The FTSE 100 gained 0.58% to 10,585.90, supported by energy and materials names as commodity prices firmed. The Netherlands’ AEX rose 0.57% to 1,096.74 — a session that will have helped ASML, which tends to track the broader Dutch benchmark closely.

The laggards were still positive but more subdued. France’s CAC 40 managed only a 0.28% advance to 8,363.14, held back by luxury-sector indecision, while Switzerland’s SMI edged up 0.31% to 14,298.26 as defensives like Nestlé and Roche offered less upside in a risk-on session. The lone red print came from Copenhagen, where the OMX C25 slipped 0.26% to 1,883.06 — Novo Nordisk weight likely dragging on that index.

US Overnight Snapshot

Wall Street delivered the kind of session European bulls want to see heading into Wednesday. The S&P 500 rose 0.89% to 7,510, the Nasdaq Composite surged 1.29%, and small-caps joined the party with the Russell 2000 up 1.45%. The VIX dropped 8.58% to 17, well below the stress threshold — a clear signal that hedging demand is fading.

Technology was the standout sector, with XLK jumping 2.89%. Headlines point to a broad chip recovery — Micron and peers bouncing hard, Super Micro soaring on a margin surprise. That strength should carry directly into European semiconductor and tech hardware names: ASML, Infineon, and SAP are the obvious beneficiaries at the open. Energy stocks also pushed higher (XLE +0.97%), which maps cleanly onto Shell, BP, and TotalEnergies in London and Paris.

One note of caution: Bank of America’s CEO warned that inflation could back the Fed into a corner. Financials barely moved (XLF +0.12%), suggesting bond markets may have a different view than equities on where rates go next.

Commodity + FX Watch

Gold pushed through $4,120, gaining 1.20% — a move that reads as inflation hedging rather than pure risk-off given the equity backdrop. That’s constructive for London-listed miners like Fresnillo. WTI crude climbed 1.68% to $86.30, its highest level this month, directly supporting Shell, BP, and Equinor at the open. Copper was flat, slipping 0.11% — no fresh signal for the European industrials that track it.

On the FX side, AUD/USD was essentially unchanged (-0.04%), while USD/JPY pushed to 163 (+0.38%), signalling continued dollar strength against the yen. For European exporters, the key question is EUR/USD direction — a firm dollar tends to flatter euro-denominated earnings for Airbus, LVMH, and the German auto sector when they report. The Swiss franc held steady, keeping pressure off the SMI’s multinational exporters.

What to Watch Today

• Tech carry-over trade: The Nasdaq’s 1.29% rally and XLK’s 2.89% surge set up a gap-higher open for European tech. Watch ASML, SAP, and Infineon in the first 30 minutes — if they hold the opening pop, the DAX stays above 25,000 comfortably.
• Energy momentum: Oil above $86 gives Shell and BP fresh fuel. The FTSE 100’s energy weighting means London could outperform Frankfurt if crude holds these levels through the European morning.
• Inflation narrative: The BofA CEO’s warning about inflation cornering the Fed matters for European rate expectations too. Any hawkish ECB commentary today could cool the rally, especially for rate-sensitive Southern European banks that led Tuesday.
• Spain in focus: Headlines about Spain opening doors on policy could draw attention to the IBEX 35, which already gained 0.90% Tuesday. Watch for follow-through — Spanish equities have quietly been one of the best-performing European markets this month.

Bottom Line

The setup for Wednesday’s European session is clearly risk-on. A broad US rally, collapsing VIX, surging tech, and firming oil all point to a positive open across London, Frankfurt, and Paris. The only speed bump is the inflation warning from BofA — if bond yields spike on that narrative, the opening gains could fade by midday. For now, though, the path of least resistance is higher, and Luna3 readers should be watching the tech and energy names that benefit most from the US carry-over.

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