European Midday Briefing: Shares Up, Oil Below $100 as Investors Digest Midterm Results

MARKET WRAPS

Stocks:

European shares were up while oil stayed below $100 as investors digested the implications of the Democratic sweep in the U.S. midterm elections.

Banks and autos were among the strongest-performing sectors, with the Stoxx 600 on pace to close at a record high.

Meanwhile, AI stocks continued to weaken globally. Investors are weighing what a Democrat-controlled Congress may mean for data centers and the build-out of artificial intelligence.

"Looking through the knee-jerk volatility, the outlook for hyperscalers may improve if they slow down spending without hurting growth from investments made so far, but the outlook for AI enablers and the broader AI complex has arguably become more challenging following the midterms," Swissquote said.

Oil prices were mixed following a sharp selloff in the previous session as traders assessed the outlook for U.S.-Iran relations and recovering oil supplies from the Middle East.

In the U.K., the focus today is on the Bank of England's meeting, where policymakers are widely expected to vote to lift its key bank rate to 4% from 3.75%.

The drop in oil prices is likely to alleviate pressure on the BOE to act, Ebury said. "We expect the BOE to deliver a 25 basis-point hike on Thursday, but we do not think the MPC will endorse market pricing for further tightening in 2027."

U.S. Markets:

Stock futures were mixed after rallying following the Democrats' midterm sweep.

For the day ahead, ConocoPhillips and Sony Group are among the companies reporting earnings before the opening bell.

Forex:

The dollar remained under pressure after falling to a one-month low Wednesday following a sharp fall in oil prices and the midterms results.

Sterling traded steady against the dollar and fell slightly versus the euro as investors awaited the BOE's policy decision.

Bonds:

Eurozone government bond yields fell in opening trade on Thursday, in line with a drop in Treasury yields.

Long-end Treasury yields fell to eight-week lows as investors saw relief for bond markets from prospects of tighter fiscal constraints.

Investors are viewing the U.S. midterm results as supportive for bonds and equities, as they raise the bar for additional fiscal expansion and introduce the possibility of more checks on policy, said BondBloxx Investment Management.

Energy:

Oil prices stayed below $100 as markets reckoned that the Democratic sweep in the U.S. midterms could increase pressure to end the war in the Middle East, CBA said.

Gas

European natural-gas prices remained under pressure, tracking oil lower on hopes that the U.S. midterm results could increase pressure on the Trump administration to seek a diplomatic resolution to the Iran war. Metals:

Gold futures rose to a two-week high, supported by a weaker dollar and declining Treasury yields after the Democratic sweep of Congress raised expectations of tighter fiscal discipline.

Copper

Copper prices edged lower in the aftermath of the U.S. midterm elections, as investors weighed the potential implications of a Democrat-controlled House for U.S. data-center investment, a key driver of demand for the industrial metal.

EMEA HEADLINES

Rheinmetall Shares Plunge After Order Delays Force Arms Maker to Trim Guidance Again

Rheinmetall shares slumped after the German defense group cut its annual forecasts for the second time this year as some lucrative orders faced delays, the latest setback for the company after it lost a big frigate order from the German government.

The company said it expected sales of roughly 13.2 billion euros ($14.82 billion) in 2026, below a prior guidance range of between 13.7 billion and 14.2 billion euros. Meanwhile, its operating margin should come in at about 18.5% for the year, below a prior forecast of around 19%.

Maersk Shares Tumble After Earnings, Guidance Disappoint

A.P. Moller-Maersk shares tumbled after the shipping group's third-quarter earnings disappointed and a fresh guidance upgrade, driven by higher freight rates, failed to impress investors.

Shares fell as much as 12% in early European trade.

ArcelorMittal Says Europe's Steel Tariffs Are Boosting Profits

European tariffs are helping the continent's steel industry to offset current high energy prices, boosting earnings, ArcelorMittal said.

Europe's largest steelmaker booked a 34% surge in earnings before interest, taxes, depreciation and amortization, a key profit metric, over the third quarter of the year, it said Thursday.

Air France-KLM Shares Jump After Strong Profit Eclipses Rising Fuel Bill

Air France-KLM shares climbed after the Franco-Dutch carrier group reported strong profitability in the third quarter, showing investors that it can contain costs despite monthslong tensions in the Middle East that keep fuel prices elevated.

The company posted a third-quarter net profit of 908 million euros, equivalent to $1.02 billion, up from 730 million euros a year earlier. Adjusted operating profit-closely watched by investors-grew to 1.35 billion euros from 1.22 billion euros, above analysts' forecast of 1.08 billion euros, according to a market consensus provided by the company.

GLOBAL NEWS

Oil Prices Stay Below $100 as Traders Weigh Iran Diplomacy, Supply Outlook

Oil prices were mixed Thursday following a sharp selloff in the previous session as traders assessed the outlook for U.S.-Iran relations and recovering oil supplies from the Middle East.

Front-month Brent crude, the global oil benchmark, rose 0.2% to $94.76 a barrel in early European trading. West Texas Intermediate, the U.S. benchmark, fell 0.7% to $86.53 a barrel.

U.S. Treasury Yields Fall to Eight-Week Lows as Markets Digest Midterm Results

Long-end Treasury yields fell to eight-week lows on Thursday as investors saw relief for bond markets from prospects of tighter fiscal constraints following the Democrat sweep in U.S. midterm elections.

Voters delivered a rebuke to President Trump and his party, stripping Republicans of congressional control amid widespread frustrations with the economy.

German Factory Orders Rebounded in September

German manufacturing orders rebounded in September, partially reversing the steep decline recorded in the previous month and adding to signs of resilience as higher energy costs continue to threaten the country's tentative economic recovery.

Factory orders in the eurozone's largest economy rose 4.4% on month, compared with a 10.1% decline in August, data agency Destatis said Thursday. This came in slightly above a consensus of economists polled by The Wall Street Journal, which expected an increase of 4.3%.

Saudi Arabia Has No Easy Choices as It Weighs How to Combat Houthi Threat

DUBAI-After Yemen's Iran-backed Houthi rebels attacked Saudi Arabian oil tankers in the Red Sea and seized territory commanding the strategic Bab al-Mandeb chokepoint, the kingdom reached out to the group to see what it would take to arrive at a negotiated halt to the hostilities. The answer it got back: $51 billion.

The Houthis said that was the sum needed to cover the cost of years of Saudi strikes and a long blockade, people briefed on the discussions said. Other figures have come up since, the people said, but the message was clear: The price of an exit would be in the tens of billions of dollars. For good measure, the Houthis would want the kingdom to officially recognize the militants as the rulers of Yemen, effectively accepting an Iranian-armed adversary on its southern border.

Hong Kong Extends Jailed Activist Joshua Wong's Prison Term by 10 Years

HONG KONG-Joshua Wong, the imprisoned Hong Kong activist who was once the young face of the city's pro-democracy movement, was sentenced Thursday to a new, 10-year prison term for violating the city's National Security Law.

Wong, 30 years old, pleaded guilty in September to a charge of conspiracy to collude with foreign forces in calling for sanctions against Hong Kong and China. The security law, which Beijing imposed on Hong Kong in 2020, prohibits such calls for sanctions.

U.S. Was Unprepared for Drone Warfare, Pentagon's Emil Michael Says

The Pentagon's technology chief said the U.S. had been unprepared for the modern era of drone warfare and is racing to arm its troops with the autonomous systems that have come to dominate conflicts in Europe and the Middle East.

"We were caught flat-footed by the drone warfare in Ukraine and Russia," Emil Michael, the Defense Department's under secretary for research and engineering, said at the WSJ Tech conference Wednesday. "We weren't prepared because we just didn't imagine it. I just want to make sure we are imagining the next fight."

The Election Day Revolt That Threatens America's AI Boom

The biggest names in America's artificial-intelligence boom gathered at the San Francisco Opera House on election night for a show hosted by Nvidia CEO Jensen Huang.

They were there to see "The Marriage of Figaro." But over wine and passed hors d'oeuvre, executives in tuxedos buzzed about an emerging threat to their industry, people in attendance said: election results were coming in overwhelmingly against the massive build-out of computing capacity that Silicon Valley is counting on to power its future.

Write to priscila.barrera@wsj.com

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

(END) Dow Jones Newswires

November 05, 2026 05:13 ET (10:13 GMT)