European Midday Briefing: Shares Lower as French Politics Continue to Dominate

MARKET WRAPS

Stocks:

European shares were down on Tuesday as AI infrastructure stocks came under pressure across the globe.

The industrial-heavy German DAX fell, with Siemens Energy falling 2.7% and Siemens falling 3.4%. Industrials also dragged the CAC 40 in Paris, where Schneider Electric was 3.5% lower while chip maker ST Microelectronics dropped 2.5%.

Shares of semiconductor companies were in decline after a day of gains, resuming the selloff.

French politics is likely to dominate the day as the country's National Assembly is scheduled to vote on the revenue section of the 2027 draft budget bill, Commerzbank said. "The public unrest certainly does not support OAT sentiment."

Muzinich & Co added that the political gridlock and the approach of the 2027 elections make it difficult to implement corrective measures in France and it could prolong market uncertainty.

Meanwhile, oil prices rose as traders weighed persistent Middle East supply risks against signs of recovering Gulf crude exports and prospects for additional Russian energy supplies.

Economic Insight

In the U.K., wage growth rose a little in the three months through August, with unemployment also falling, raising the likelihood that the Bank of England will raise its key rate next month.

ICAEW, however, believes that "the U.K. jobs market is facing a tougher end to the year with unemployment likely climbing back above 5% as the financial squeeze from rising energy costs and greater automation restrains hiring."

U.S. Markets:

Stock futures indicated a mixed opening on Tuesday.

Investors await earnings from SpaceX, Netflix, General Motors, Aerospace and RTX.

Forex:

The euro rose as a period of consolidation looked necessary after recent sharp falls but the recovery should prove limited, ING said.

Sterling rose after data showed an unexpected decline in the U.K. unemployment rate for the three months to August.

The dollar fell as concerns about the sustainability of debt-funded AI investments persisted.

Bitcoin fell as oil prices turned higher on concerns about the Middle East conflict.

Bonds:

Eurozone government bond yields opened lower, moving in line with Treasury yields, with focus remaining firmly on French government bonds.

French government bond yield spreads could remain under pressure amid unrest over the government's budget deficit reduction plans, Danske Bank said.

Citi said the risk premium for French government bonds is in uncharted territory, leaving bond investors to be driven by sentiment.

Yields on U.K. government bonds traded steady after robust U.K. jobs data raised expectations for a BOE rate increase next month.

Energy:

Oil prices rose, with Brent crude back above $110 a barrel as persistent attacks on shipping in the Strait of Hormuz and Houthi strikes on Saudi Arabia kept the risk premium high.

Metals:

Gold prices slipped in early European trading as rising energy prices heighten inflation concerns, while investors await next week's Fed's policy meeting for more cues on the rate outlook.

EMEA HEADLINES

ABB to Pay $495 Million for Controlling Stake in Mitsubishi Electric Unit

ABB said it is investing roughly $495 million to buy a controlling stake in the newly carved out low-voltage-power distribution business of Japan's Mitsubishi Electric.

The Swiss engineering group said Tuesday that it is forming a joint venture with Mitsubishi Electric to strengthen its position in Japan, with an option to take full ownership over the medium term.

Anglo American's Quarterly Copper Production Slips on Extreme Weather in Chile

Anglo American's third-quarter copper production slipped due to extreme weather in Chile, but an expected rise in copper grades over the remainder of the year enabled the miner to keep its full-year guidance unchanged.

The London-listed mining giant said Tuesday that it dug out 174,900 metric tons of copper over the period, a 5% fall on the same period a year prior due to snowfall in Chile interrupting mining and production.

Marine Le Pen Seizes on French Chaos to Present Herself as Leader in Waiting

PARIS-The riots sweeping France have rocked the country's political establishment, but one person is positioned to emerge from the chaos with a stronger hand: Marine Le Pen.

For more than a decade, the far-right leader has cast France as a nation adrift, buffeted by waves of immigration and lawlessness that have torn at the country's social fabric. As bands of hooded rioters in dark clothing have descended on city centers across France, raiding city halls and looting thousands of stores, Le Pen has sought to present herself as the sole candidate in this spring's presidential election willing to restore order.

GLOBAL NEWS

Stock Pickers Burned by the AI Boom Think Their Moment Has Finally Arrived

AI skeptics like Timothy Casaletto are having a tough stretch.

The artificial-intelligence frenzy that fueled a record run for stocks has left the biggest fund he manages starkly underperforming the S&P 500. The Vanguard Dividend Growth Fund is up 55% over the past four years, compared with a return of 126% for the S&P 500, through Friday.

Albertans Vote to Stay in Canada in Historic Referendum

EDMONTON, Alberta-Voters in Alberta chose to stay in Canada by a convincing margin in a historic referendum on Monday, according to projections from the Canadian Broadcasting Corp., staving off an economic and political crisis that Prime Minister Mark Carney argued the country could ill afford.

With 41% of polls reporting early Tuesday, the CBC put preliminary results at above 76% of voters backing remaining in Canada, while just under a quarter supported holding a second, binding referendum on separation. The remain vote appeared to be leading in all regions of the province, with more than 80% in the big cities of Edmonton and Calgary voting to remain, plus over 60% in some more rural central areas of the province, the CBC projected. Polls had shown that most Albertans opposed a second referendum, but federalists worried the option might appeal to those wanting to send a message of protest to the federal government.

Vance Declines to Endorse Netanyahu in Re-Election Bid

Vice President JD Vance declined to back Benjamin Netanyahu in Israel's coming elections, a break from President Trump who has given the Israeli prime minister his backing.

Trump said in a post on Truth Social on Sunday that Netanyahu "has been a Great Warrior Prime Minister, and an even greater Partner for Peace in combatting the Islamic Republic of Iran." The Oct. 27 election is the first national election since Hamas attacked Israel on Oct. 7, 2023, and will be a referendum on Netanyahu's response.

Trump Says He Would Be Open to Meeting With Putin and Xi

WASHINGTON-President Trump said Monday that he would be open to meeting with the leaders of Russia and China to discuss denuclearization.

Trump's comments came after The Wall Street Journal reported that Russian President Vladimir Putin has proposed that he, Trump and Chinese leader Xi Jinping meet next month to talk about Ukraine in an attempt to negotiate an end to the four-year conflict that would favor Moscow.

Write to nina.kienle@wsj.com

Write to us at newsletters@dowjones.com

We offer an enhanced version of this briefing that is optimized for viewing on mobile devices and sent directly to your email inbox. If you would like to sign up, please go to https:\\newsplus.wsj.com/ subscriptions.

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

(END) Dow Jones Newswires

October 20, 2026 05:18 ET (09:18 GMT)