Where Europe Closed Last Session

Germany’s DAX 40 was the standout, climbing 1.04% to 25,361 as export-heavy industrials and autos caught a bid. Spain’s IBEX 35 followed at +0.80% to 19,741, with Italian equities not far behind — the FTSE MIB gained 0.49% to 52,055. Switzerland’s SMI added 0.66% to 14,422, suggesting defensive names held their ground alongside the cyclical rally.

The UK’s FTSE 100 rose 0.42% to 10,782, a modest gain that lagged the continent. France’s CAC 40 was in the same neighbourhood at +0.40% to 8,406. The Euro STOXX 50 barely moved, adding just 0.02% to 6,282 — a sign that large-cap eurozone breadth was thin despite the DAX’s strength.

The clear laggard was the Netherlands’ AEX, dropping 0.82% to 1,081. That underperformance likely reflects ASML’s weight in the index and broader semiconductor headwinds that carried into the US tech session overnight. Copenhagen’s OMX 25 also slipped 0.19% to 1,830.

The takeaway: Monday’s session rewarded continental cyclicals and punished tech-heavy benchmarks. Whether that rotation extends into Tuesday depends on what Wall Street delivered overnight.

US Overnight Snapshot

Wall Street offered little conviction. The S&P 500 finished essentially flat at +0.02%, while the Nasdaq Composite slipped 0.18%. The Russell 2000’s +0.60% gain told the more interesting story — small caps outperformed for a second straight session as money rotated out of mega-cap tech.

Sector moves sharpen the picture. Technology (XLK) fell 0.90%, which will weigh on ASML, SAP, and Infineon at the European open — reinforcing the AEX weakness from Monday. Financials (XLF) rose 1.01%, a tailwind for eurozone banks like BNP Paribas and UniCredit. Energy (XLE) dropped 2.11%, the session’s biggest sector loser, on headlines around Iran war disruptions paradoxically hitting demand expectations harder than supply fears.

The VIX ticked up to 18.7 (+0.48%) — not yet at the 20 alarm level, but drifting higher ahead of Meta and Microsoft earnings this week. Those reports will set the tone for European tech valuations through the back half of the week.

Commodity + FX Watch

Oil’s 1.92% drop to $81 WTI is the headline commodity move. Standard Chartered flagged that markets now need to price two Middle East chokepoints, yet the session sold off on demand fears tied to jet fuel cost spikes and airline disruptions. For Europe, cheaper oil is a net positive for consumer names but will pressure Shell, BP, and TotalEnergies at the open.

Gold eased 0.58% to around $4,050 — a mild risk-on signal that Swiss gold miners and defensive plays may lose a small bid today. Copper held flat at +0.06%, offering no directional read for European miners.

On the FX side, AUD/USD slipped 0.28% to 0.697 while USD/JPY was flat at 164. The dollar’s modest firmness, if it extends to EUR/USD, would support euro-denominated exporters like LVMH and Airbus but could tighten financial conditions for ECB-sensitive rate plays. Watch EUR/GBP for any divergence between UK and eurozone rate expectations as the inflation narrative heats up.

What to Watch Today

• Fed rate-hike rhetoric: Headlines are framing the July Fed meeting as a “rate-hike showdown” on rising US inflation. Any hawkish leak or commentary today will hit European rate-sensitive sectors — real estate, utilities, and leveraged industrials — before the ECB even speaks.
• Big Tech earnings overhang: Meta and Microsoft report this week. The “more cracks in AI-related bonds” headline signals credit markets are already nervous. European AI proxies (ASML, SAP, Siemens) will trade on sentiment ahead of those prints.
• Oil and European energy: With WTI down nearly 2% and Iran disruption headlines escalating, European energy majors face a tug-of-war between supply-risk premium and demand-destruction fears. Shell and BP will set the tone for FTSE 100 direction early.
• DAX momentum test: The DAX’s 1.04% gain on Monday puts it back near recent highs. Watch whether German industrials can hold the bid or whether US tech weakness drags the index lower by mid-session. A close above 25,400 would confirm the breakout.

Bottom Line

Europe opens into a mixed carry-over: continental cyclicals have momentum from Monday’s session, but US tech softness and oil volatility will test that bid early. The setup favours a rotation day — financials and industrials over tech and energy — rather than a broad directional move. Luna3 readers should watch whether the DAX can hold above 25,300 and whether the AEX stabilises after Monday’s 0.82% drop, as those two benchmarks will define the session’s character.

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