Here’s the Europe Daily Preview post for Thursday, July 23, 2026:

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European markets posted their best session in over a week on Wednesday, with the FTSE 100 surging 1.24% on commodity strength — but the overnight US session delivered a different signal, with the Nasdaq sliding 0.57% on mixed tech earnings while oil climbed to a five-week high on escalating Middle East tensions.

Where Europe Closed Last Session

Wednesday’s session was green across the board for mainland Europe and the UK, with southern European exchanges leading gains. The FTSE 100 jumped 1.24% to 10,717, its strongest one-day move in weeks, powered by energy majors and miners riding the commodity wave. The CAC 40 rose 0.89% to 8,438, with the IBEX 35 up 0.99% and the FTSE MIB climbing 0.97% to 52,792 — a broad southern European bid that suggests risk appetite remains intact across the periphery.

Germany’s DAX 40 gained 0.58% to 25,155, a more measured advance that reflects the index’s heavier weighting toward industrials and autos rather than energy. The Euro STOXX 50 rose 0.50% to 6,317, confirming the pan-European tone. Swiss defensives lagged — the SMI added just 0.12% to 14,316, suggesting Nestlé, Roche, and Novartis weren’t catching a bid in the risk-on rotation.

The outlier was Copenhagen, where the OMX C25 fell 0.74% to 1,836. The Dutch AEX managed only +0.37%, potentially held back by ASML’s sensitivity to the weaker Nasdaq tone filtering through late in the session.

US Overnight Snapshot

Wall Street closed with a clear sector split. The S&P 500 slipped 0.14% and the Nasdaq Composite fell 0.57%, dragged lower by tech after IBM cut its outlook and the broader AI trade took a breather. The Russell 2000 dropped 0.93%, the sharpest decline of the major indices — small-caps are feeling the Treasury market pressure, with yields touching levels not seen since 2007.

The energy sector was the standout winner, with XLE up 1.20% on the oil spike. Materials (XLB) gained 1.44%, the session’s best-performing sector. The VIX eased 2.4% to 16.6, which reads as complacency given the geopolitical backdrop — markets are pricing oil supply risk into energy stocks without broadly hedging equity downside.

For Europe, the Nasdaq weakness will weigh on ASML, SAP, and Infineon at the open. But the energy bid should carry directly into Shell, BP, and TotalEnergies, extending Wednesday’s momentum.

Commodity + FX Watch

WTI crude rose 2.03% to $88.60, hitting a five-week high on reports of US-Iran military exchanges and renewed Houthi threats to Red Sea shipping. This is directly bullish for London-listed Shell and BP, and for Eni and TotalEnergies on the continent. Copper gained 0.98%, a positive read-through for Glencore and the European mining complex.

Gold pulled back 0.54% to around $4,120 — a notable dip that suggests the risk-off haven bid hasn’t fully engaged despite the Iran headlines. For Swiss markets, Swatch and Richemont are more rate-sensitive than gold-sensitive, so the move is secondary.

On FX, AUD/USD ticked up 0.09% to 0.701, while USD/JPY was flat at 163. The steady dollar means no major tailwind or headwind for European exporters — Airbus, LVMH, and the German automakers open on a neutral FX footing.

What to Watch Today

• Oil supply risk is the dominant theme. WTI above $88 with Houthi blockade threats and US-Iran tensions escalating — European energy names (Shell, BP, TotalEnergies, Eni) should gap higher, but watch for profit-taking if headlines de-escalate during the European morning.
• Treasury yields at 2007 levels feed into European rate expectations. If Bund yields follow US Treasuries higher, rate-sensitive sectors like European banks and real estate will feel the pressure. The ECB holds next week — any hawkish pre-positioning starts now.
• Tech earnings read-through. IBM’s lowered outlook and ServiceNow’s cybersecurity momentum send mixed signals. ASML, SAP, and the European semiconductor chain may open soft on the Nasdaq drag, but enterprise software names could find support.
• Copenhagen weakness. The OMX C25’s 0.74% decline stands out against the green tape — watch Novo Nordisk and DSV for follow-through. If the weight-loss drug trade is rotating out, that has implications for healthcare across the continent.

Bottom Line

The setup for Thursday’s European open is split by sector, not by geography. Energy and materials have a clear tailwind from oil’s five-week high and copper strength, while tech faces headwinds from the Nasdaq’s overnight slide and mixed US earnings. The VIX at 16.6 says equity markets aren’t pricing much fear yet, but the Iran-driven oil spike and Treasury yields at 17-year highs are a combination that can shift sentiment fast. Luna3 sees a session where commodity-heavy indices like the FTSE 100 outperform, while tech-weighted boards in Amsterdam and Copenhagen may give back some ground.

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