U.S. Stock Futures Steady as French Fiscal Pressure Raises Contagion Risk

By Joe Stonor

U.S. stocks were steady and Treasurys largely strengthened in early European morning trade, while the euro came under strain amid concern that French fiscal stress would spread elsewhere on the continent.

Major U.S. stock indexes were little moved after rising sharply Friday, when weak jobs data dimmed market expectations for Federal Reserve rate hikes and supported risk assets. Futures for the Dow Jones Industrial Average and the S&P 500 slipped 0.1%, while Nasdaq futures were flat. Asian stocks mostly gained as the continent caught up on Friday's jobs data. Japan's Nikkei climbed 2.4%, while indexes in mainland China, Hong Kong and Korea also gained. European stocks were mixed in volatile early trade, with the Stoxx 600 last rising 0.4%.

Political pressures mounted on markets across the globe, with French budget pressures added to by Spanish leader Pedro Sanchez's call for a snap election Monday. In Brazil, the surprise first-round election win for right-wing candidate Flavio Bolsonaro could shake markets in both South America and Europe.

The euro fell to a 16-month low against the U.S. dollar as concern around French government spending started to weigh on the continent's common currency. Spreads between French 10-year yields and German 10-year Bund yields widened, though yields on French bonds held below multidecade highs hit Friday.

"The big question is whether this is the start of a new euro sovereign crisis or whether markets have already overshot," Deutsche Bank's Jim Reid said.

Oil prices fell after Saudi Arabia sharply cut the price of its flagship crude grade for Asian buyers as flows through the Strait of Hormuz picked up. Brent crude contracts for December dropped 1.1% to trade around $101 a barrel, while WTI contracts fell 1.6% to trade below $90 a barrel.

Bitcoin and gold both strengthened slightly, with bitcoin adding 0.6% to trade around $86,300. Gold gained 0.5%, but held below $4,200 a troy ounce in New York.

Later Monday, the September ISM services index will help shape market views on the U.S. economy's health. For the week ahead, Fed meeting minutes Wednesday will give investors insight into policymakers' outlook for rates.

Write to Joe Stonor at josephmichael.stonor@wsj.com

(END) Dow Jones Newswires

October 05, 2026 04:52 ET (08:52 GMT)