European Midday Briefing: AI Stocks Slide, Oil Tops $112

MARKET WRAPS

Stocks:

European shares fell Thursday as higher oil prices and another tech wobble weighed on sentiment.

Earnings releases from AI companies disappointed investors and put an abrupt stop to Wednesday's relief rally. Shares in technology companies fell broadly across the board after a selloff in Asia.

"The problem here is that expectations are quite high going into the quarter," said Quilter Cheviot. "It's a difficult setup because you've got to smash it out the park to get your stock to work."

Oil prices rose 3%, with Brent crude climbing above $112 a barrel as traders weighed renewed attacks on Saudi energy infrastructure and the risk of further U.S.-Iran hostilities against recovering Middle East oil supplies.

Meanwhile, French bond yields continued to tick up due to concerns about the budget and social unrest.

U.S. Markets:

Stock futures were lower on Thursday as investors digested Meta and Tesla's financial results, which both came in after the closing bell.

Forex:

The euro rose against a weaker dollar. "One can only conclude that the biggest market driver at the moment is the heavy and concentrated positioning in U.S. tech and the dollar, which is being gently pared back," ING said. The dollar fell to a three-week low against a basket of currencies as Treasury yields declined and concerns about the sustainability of debt-funded investments in artificial intelligence infrastructure.

Bonds:

French government bonds continued to underperform their German counterparts due to concerns about the budget and social unrest.

Should concerns over France intensify, German government bonds could once again be sought as a "safe haven," Eyb & Wallwitz said.

The pressure on French bonds came as Treasury yields slid amid falls in equities and worries about the sustainability of debt-funded investments in artificial intelligence infrastructure. Concerns about economic growth meanwhile are increasingly outweighing inflation worries. Energy:

Oil prices climbed after another deadly attack in Saudi Arabia. Wednesday's attack hit the international airport in the eastern city of Dammam, an oil-producing area near Bahrain. Metals:

Gold fell more than 1% as energy prices pushed higher, adding to inflation concerns. Investors now await next week's Federal Reserve meeting for further cues on the monetary policy path and its impact on bullion.

EMEA HEADLINES

Roche Posts Higher Sales on Growth Across Pharma, Diagnostics Units

Roche Holding reported higher sales for the third quarter on growth in its pharmaceuticals and diagnostics units, as the drugmaker works to secure approval for its new breast-cancer and multiple-sclerosis pills.

The Swiss group said Thursday that third-quarter sales came to 16.13 billion Swiss francs ($19.57 billion) compared with 14.92 billion francs for the same period last year. Analysts polled by Visible Alpha had forecast quarterly sales at 15.78 billion francs.

Hermes Sales Growth Slows as Luxury Backdrop Remains Tough

Hermes said sales growth lost pace in the third quarter, as hopes of a recovery in luxury demand dwindle.

The French luxury house booked revenue of 4.1 billion euros ($4.61 billion) for the quarter through September, 4.3% higher than in the same period a year earlier at constant currency exchange rates. In the second quarter, the Parisian maker of high-end handbags and silk scarves logged a 6.7% increase in revenue.

Nestle Sales Get Boost From Rebound of Hot Pockets and Frozen Pizza in America

Nestle booked a rise in sales for the third quarter amid a revival of its snacking businesses in the Americas.

The Swiss packaged-food group, which counts KitKat and Nescafe among its brands, reported third-quarter sales of 22.76 billion Swiss francs, equivalent to $27.61 billion. Sales grew 4.0% organically on year, above company-compiled analyst expectations of 3.4%.

Energy Security Concerns Spur U.K. to Preserve Gas Pipelines to Europe

The U.K. energy regulator said it has taken steps to preserve underused underwater gas pipelines connecting the country's energy grid to continental Europe, preserving the ability to import European gas in case of emergencies.

The pipelines are only used occasionally but give the U.K. greater flexibility to tap gas from other sources in times of high demand, such as severe winters. Reduced commercial incentives and technical reductions in pipeline capacity have decreased the country's import capability in recent years, Ofgem said.

GLOBAL NEWS

Oil Prices Rise More Than 2% as Attacks on Saudi Arabia, U.S.-Iran Risks Persist

Oil prices rose more than 2% Thursday, with Brent crude climbing above $111 a barrel as traders weighed renewed attacks on Saudi energy infrastructure and the risk of further U.S.-Iran hostilities against recovering Middle East oil supplies.

December Brent crude futures rose 2.7% to $111.7 a barrel, while December West Texas Intermediate futures gained 2.5% to $99.57 a barrel.

French Government-Bond Yields Rise, Spread Widens as Treasury Yields Fall

French government bonds came under intense selling pressure again early Thursday, taking the spread between 10-year French and German yields to its highest level since 2011.

The 10-year French OAT-German Bund yield spread widened to 164 basis points, according to LSEG data. The 10-year French yield traded above 5%, hitting its highest since 2002 at 5.0601%.

Iran's Fleet of Shadow Tankers Has Run Out of Oil After Monthslong U.S. Blockade

For most of the war, Iran had an invaluable cushion: dozens of oil tankers holding millions of barrels of crude sitting safely in waters in Asia. Tehran steadily sold the oil to China, bringing in billions of much-needed cash.

Now, that floating storage is gone. By mid-October, the reserves were fully depleted, according to analysts at Kpler, as a U.S. naval blockade prevented Iran from replacing the crude it normally sells to Chinese refineries.

Bank of Korea Holds Rate Steady After Back-to-Back Hikes

South Korea's central bank held its policy rate steady Thursday after two consecutive increases but signaled further tightening as strong growth and above-target inflation persist.

The Bank of Korea kept its benchmark seven-day repurchase rate at 3.00% after raising it in July and August. The unanimous decision matched the expectations of all 23 economists surveyed by The Wall Street Journal, most of whom forecast another increase in November.

Elon Musk's Starlink Speed Cap Has Scrambled Ukraine's Defenses

KYIV, Ukraine-As six Ukrainian drones buzzed toward a Russian army warehouse in occupied eastern Ukraine on Monday, the pilots found their connections disrupted.

Any time they flew faster than 100 miles an hour, the video feed cut out-the result of new limits put in place last week for Ukrainian drones using Starshield, a military version of Elon Musk's Starlink satellite-internet service. Musk himself imposed the limits, The Wall Street Journal has reported.

One Person Killed and 8 Injured in Airport Attack in Saudi Arabia

Authorities in Saudi Arabia on Wednesday blamed Iran-backed Houthi militants for a new attack on a civilian airport that resulted in casualties, as the U.S. said it was pulling some diplomatic personnel from the country in response to continuing threats from the Yemen-based group.

Saudi Arabia's General Authority of Civil Aviation said one person was killed and eight others were injured in Wednesday's attack that hit the international airport in the eastern city of Dammam, an oil-producing area near Bahrain that is home to thousands of the industry's foreign workers.

Iran's Fleet of Shadow Tankers Has Run Out of Oil After Monthslong U.S. Blockade

For most of the war, Iran had an invaluable cushion: dozens of oil tankers holding millions of barrels of crude sitting safely in waters in Asia. Tehran steadily sold the oil to China, bringing in billions of much-needed cash.

Now, that floating storage is gone. By mid-October, the reserves were fully depleted, according to analysts at Kpler, as a U.S. naval blockade prevented Iran from replacing the crude it normally sells to Chinese refineries.

AI Just Found a Bug That Puts up to 70% of the World's Websites at Risk

First, artificial intelligence heralded the Bugmageddon. Now it is triggering an all-hands-on-deck cyber emergency.

The creators of PHP, a technology that powers as much as 70% of the world's websites, disclosed a critical security issue Wednesday that could be leveraged by hackers to take control of any system running its software. That would allow an attacker to steal information or launch a cyberattack on anyone visiting a hacked website.

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

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October 22, 2026 05:14 ET (09:14 GMT)

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