European Midday Briefing: Oil Climbs, Chip Stocks Fall Amid Tech Selloff

MARKET WRAPS

Stocks:

European shares dropped sharply as rising oil prices and a fresh artificial-intelligence wobble weighed on sentiment.

Oil prices climbed as attacks on shipping in the Persian Gulf intensified, while Tropical Storm Isaias was expected to reach the U.S. Gulf Coast late Friday as a hurricane.

European semiconductor companies were in negative territory Thursday as investors sold off tech stocks with exposure to artificial intelligence. Investors are reassessing the balance between hype surrounding artificial intelligence and cost pressures driven by energy price spikes, Tickmill Group said.

For the day ahead, the European Central Bank is due to publish minutes from its September meeting.

In the U.K., markets will be assessing comments from Bank of England Governor Andrew Bailey and official Clare Lombardelli later in the day.

High energy prices have raised inflation concerns, leading investors to fully price in four quarter-point BOE rate increases by September 2027, LSEG data show.

The BOE may not need to raise rates aggressively as high energy bills and elevated interest rates are likely to limit consumer demand, Berenberg said.

Economic Insight

German exports fell again in August, pointing to volatility in international demand and dimming hopes that trade will underpin the country's economic growth this year.

After promising industrial production data and encouraging recent sentiment indicators, weaker German export data undermine the recent narrative of German industrial resilience, ING said.

U.S. Markets:

Stock futures were down Thursday as oil prices rose while chip makers fell premarket.

"Global equity markets fell on Thursday as surging crude prices and escalating Middle East tensions reignited stagflation concerns, ending a rally that had brought major benchmarks back toward record highs," Tickmill Group said.

Forex:

The euro traded flat. The currency is likely to face further weakness in the near term due to concerns about France's fiscal position, Commerzbank said.

The dollar remained firm as the Federal Reserve's latest meeting minutes pointed to further rate increases.

Sterling's recent gains against the euro could extend further on the prospect of the BOE raising interest rates at its next meeting, ING said.

Bonds:

Eurozone government bond yields rose in tandem with Treasury yields, with pressure remaining particularly strong on French bonds.

Higher Treasury yields reflect an economy that has remained resilient, inflation that is still above target, and a fiscal backdrop that requires substantial Treasury issuance, said BondBloxx Investment Management.

Infrastructure Capital Advisors are bullish on the 10-year Treasury note as it anticipates the Fed will raise interest rates only one more time. One rate hike would be in line with the Fed's dot plots, and would be fewer than priced in by markets. Energy:

Brent crude rose 3.9%, while WTI gained 3.7%.

Gas

European natural-gas prices climbed back above 80 euros a megawatt-hour as concerns over continued attacks on shipping in the Gulf raised fresh questions about the security of LNG supplies.

Metals:

Gold prices ticked higher as traders assess the possibility of another Federal Reserve interest-rate hike this year.

"The price action highlights an ongoing battle between macro and technically focused traders selling gold in response to higher funding costs and dollar strength, and investors seeking protection against the potential fiscal fallout from rising debt and borrowing costs," said Saxo Bank.

EMEA HEADLINES

Oil Majors Cut Production in Gulf of Mexico as Tropical Storm Isaias Strengthens

Oil companies operating in the Gulf of Mexico have begun curbing production and evacuating personnel from offshore facilities as the region braces for Tropical Storm Isaias.

The storm is intensifying and is expected to have strengthened to a powerful hurricane by the time it makes landfall Friday, the National Hurricane Center said.

Porsche AG Increases Stake in Manthey Racing to 67%

Porsche has increased its stake in German auto racing team and performance tuning company Manthey Racing as part of its new strategy that will see it expand the number of optional performance extras it can offer to Porsche buyers.

The German luxury sports car maker on Wednesday outlined a plan to accelerate profitability over the coming years, which included expanding the individualization options on its cars.

Imperial Brands to Launch $2 Billion Buyback After Meeting Profit Growth Target

Tobacco company Imperial Brands said it expects to report that it met its targets for the fiscal year through September, and set out plans to buy back 1.5 billion pounds ($1.98 billion) in shares in fiscal 2027.

The London-listed company said it expects to report adjusted operating profit growth for fiscal 2026 within its 3% to 5% guidance range. It also expects to report high-single-digit adjusted earnings per share growth and free cash flow of more than 2.2 billion pounds for the year.

Tesco Lifts Lower End of Profit Outlook on Sales Momentum

Tesco lifted the lower end of its annual profit outlook, saying resilient consumer confidence helped it sustain sales momentum as the group continues to dominate the U.K. grocery sector.

The British supermarket chain now expects adjusted operating profit to be 3.15 billion pounds to 3.30 billion pounds, or $4.16 billion to $4.36 billion, for the fiscal year ending in February.

GLOBAL NEWS

Oil Prices Rise More Than 2% Amid Houthi Attacks, U.S. Gulf Shut-Ins

Oil prices rose more than 2% Thursday amid escalating Houthi attacks in Saudi Arabia, another tanker strike in the Persian Gulf and growing U.S. offshore production shut-ins as Hurricane Isaias approaches the northern Gulf Coast.

December Brent crude futures rose 2.6% to $102.79 a barrel, while December West Texas Intermediate futures gained 2.2% to $89.46 a barrel.

German Exports Fall Further, Clouding Picture of Resilience

German exports fell again in August, pointing to volatility in international demand and dimming hopes that trade will underpin the country's economic growth this year.

Exports declined 0.8% on month to 137.6 billion euros ($154.08 billion), following a 0.5% decline in July, Germany's statistics agency said Thursday. This marks the largest fall in exports since November 2025.

What Six Years of Inflation Mean for the Midterms

Four years ago, in the run-up to the last midterm elections, prices were rising more than twice as quickly as they are now. President Trump has repeatedly reminded voters of the 2022 inflation rate, blaming high prices on his predecessor.

But Americans, weary from six years of quickly rising prices that have eaten away at their paychecks, might blame Republicans anyway as they head to the polls next month.

Suspected Iranian Drone Plot Raises Security Questions at U.K. Bases

A suspected Iranian plot to attack prized U.S. B-1 bombers housed at Britain's RAF Fairford exposed an Achilles' heel in U.K. defenses: Its air bases are far from drone-proof.

A dozen B-1 bombers were abruptly flown out of Fairford after U.S. officials said they had intelligence that Iran was plotting to target them with drones and other devices. Fears spiked after five men were arrested in the woods next to Fairford last month on suspicion of plotting a terrorist attack.

Democrats Expect to Win the House. Here's Their To-Do List.

WASHINGTON-House Democratic Leader Hakeem Jeffries said Democrats would move swiftly to reverse Trump-era cuts to healthcare spending and bring down households' costs, expressing confidence that his party would win a majority during President Trump's final two years in office.

The New York Democrat, speaking with a group of reporters, laid out some of his key priorities Wednesday should his party win back control of the House in November's midterm elections, while also nodding toward planned investigations of GOP "crooks" but giving few details.

Spain's Leader Pins Political Survival on Public Anger Over Housing Crisis

If Spanish Prime Minister Pedro Sánchez still has a shot at staying in power, it is partly because of a woman known as Maricarmen who died on Wednesday.

Sánchez this week called snap elections following nationwide protests over the country's housing crisis. María del Carmen Abascal became the face of that crisis last month, when she was evicted from her flat in Madrid after a court order. Cameras rolled as she was carried away on a stretcher, prompting instant public outrage.

Rogue Pilots Have Become One of the Biggest Threats to Airline Safety

A pilot's suspected attempt to crash a Boeing 737 MAX bound for Israel shows how one of aviation's biggest safety threats is in the cockpit.

As commercial flying has become safer, the death toll from suspected intentional crashes increasingly stands out. At least 800 people worldwide have died since 2005 in airline crashes that have been suspected by U.S. government officials or confirmed to be intentionally caused by pilots, according to accident data.

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This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

October 08, 2026 05:16 ET (09:16 GMT)