European Midday Briefing: Shares Fall as Tech Selloff Intensifies

MARKET WRAPS

Stocks:

European shares fell sharply as the rout in stocks tied to the artificial-intelligence boom spread across the globe.

The brutal losses come as sentiment toward the AI trade has already grown more fragile.

"But the jury is still out on whether the data center build-out will really be hampered - just because of the election - to the degree that markets have priced in over the past two days," Deutsche Asset Management said. "Be it because many projects had already encountered problems, including moratoriums, capacity constraints or building permissions taking long."

Oil prices edged lower, further easing pressure on Treasury yields, as traders weighed renewed security threats to Middle Eastern oil shipments. The benchmarks are on track for a staggering weekly loss of more than 13%.

However, energy prices would have to fall much further to derail prospects of interest-rate hikes by the European Central Bank and the Bank of England, Citi said.

"Only time will tell if the U.S. midterms do represent a turn for Middle East policy with implications for ECB/BOE hike prospects," it said.

U.S. Markets:

Stock futures were mixed with the Nasdaq set to climb after entering correction following the AI stock selloff.

Investors are now looking ahead to the U.S. nonfarm payrolls report at 1330 GMT for clues on the timing and extent of potential further interest-rate rises by the Federal Reserve.

Forex:

The dollar recovered.The currency is likely to firm if upcoming U.S. nonfarm payrolls data are strong, ING said.

Bonds:

German government bond yields fell to multimonth lows, tracking Treasury yields lower in response to a huge selloff in tech stocks.

Treasury yields were little changed on Friday with the initial rally following the midterm elections fading ahead of October payrolls data later in the day.

The Treasury market focus is shifting back to market fundamentals after the U.S. midterm elections, Societe Generale said.

"Stocks and bonds initially rallied on lower oil prices and the removal of a key risk event, but longer-term questions around fiscal policy, Treasury issuance, the debt ceiling, and the pace of AI investment remain."

Energy:

Oil prices fell below $100 a barrel, with investors focused on Washington's next move on Iran after the U.S. midterm elections.

Metals:

Gold prices edged lower in early trading but remained on course for a weekly gain of more than 4%, as investors turned their attention to U.S. payrolls data due later.

Copper

Copper prices fell to their lowest levels since late July as investors worried that a Democratic sweep in the U.S. midterm elections could threaten the rapid expansion of AI infrastructure and lower the risk of import tariffs.

EMEA HEADLINES

Daimler Truck Confirms Guidance as North America Trucks Business Rebounds

Daimler Truck confirmed its full-year guidance after noting the positive development seen in the second quarter accelerated further in the third quarter, supported by higher volumes and earnings at its Trucks North America unit and progress across the group.

The German truck and bus maker said incoming orders at its North America trucks business grew by 12% on year while order intake at Mercedes-Benz Trucks was up 14%. Overall global order intake rose 10%.

British Airways Owner IAG Cuts Capacity, Investment Plans as Fuel Costs Weigh

British Airways owner International Consolidated Airlines Group cut its capacity and investment expectations again, as the company trims routes to focus on profitability in response to a surge in fuel costs.

Airlines around the world have resorted to cutting money-losing flights and raising fares to protect profitability from high jet-fuel prices in the wake of the Middle East conflict. Ryanair Holdings earlier this week said it expected prices to increase, while Deutsche Lufthansa also flagged pricing momentum.

Monte dei Paschi Profit Rises as Intesa Takeover Looms

Banca Monte dei Paschi di Siena reported higher third-quarter net profit on increased revenue, as it continues to weigh a takeover offer by Intesa Sanpaolo.

The Italian lender said Friday that net profit for the quarter was 542.9 million euros ($609.2 million), up from 474.0 million euros a year ago. Analysts had forecast net profit of 468.4 million euros, according to consensus estimates compiled by Visible Alpha.

Moscow Seizes Japan Tobacco's Russia Factories

TOKYO-Russia seized control of four factories belonging to Japan Tobacco, escalating a pressure campaign against Tokyo and the West over their support for Ukraine.

Russian President Vladimir Putin late Thursday ordered the Russian assets of Japan Tobacco be placed under the temporary management of a local company, according to Russian state media.

GLOBAL NEWS

Wall Street Gets $2.5 Trillion AI Reality Check With Historic Rout of Tech Stocks

Two days after the midterm elections swept a bloc of artificial-intelligence skeptics into power, the new reality slammed into Wall Street.

Thursday's stock-market wipeout left few corners of the tech sector unscathed. Asian chip makers, Texas power producers, New Jersey cloud-computing providers, Silicon Valley software makers, contractors and data-center developers all tumbled, often in unison, in a selloff that appeared to feed on itself as the day wore on.

Hedge Funds Dump Positions and Cut Staff as Selloff Deepens

A market rout in October walloped hedge funds, forcing them to unwind positions at the highest rate in years and cut staff. The pain left many nursing deep losses even before the stock selloff intensified Thursday.

Funds trading everything from artificial intelligence and healthcare stocks to risky corporate debt felt the pain.

Wells Fargo's Top Investment Banker Sees 'Now or Never' Window for Dealmaking

Democrats' widespread victories in the U.S. midterm elections crystallized a view already held by investment bankers and advisors across Wall Street: a window to complete big corporate tie-ups under a slate of friendlier federal regulators has an expiration date.

Companies and the bankers guiding them have long considered changing political winds while evaluating whether they can push big mergers and acquisitions through without meaningful pushback from regulators.

Democrats Are Hatching a Plan to Reverse Trump's Canada Tariffs

Democrats are eyeing President Trump's trade war with Canada as the first target in a campaign to roll back his administration's tariff agenda, according to the party's senior trade lawmaker in the Senate.

"There is overwhelming support for repealing the tariffs on products from Canada," said Sen. Ron Wyden (D., Ore.), the Ranking Member on the Senate Finance Committee, who added that he was "already talking" with colleagues about legislation to push against Trump's second-term levies after he gains control of the committee in January.

Federal Judge Temporarily Blocks Construction of Trump's 250-Foot Arch

A federal district judge on Thursday night temporarily blocked construction of a 250-foot arch President Trump plans to build near Arlington National Cemetery in Washington, in the latest legal setback for one of his projects in the nation's capital.

Judge Tanya Chutkan agreed to issue a temporary restraining order to stop the administration from taking any steps over the next two weeks to start work. The order gives Chutkan more time to consider whether to block construction for the duration of litigation over the project.

Israel's Most Important Alliance Is Confronting Its Biggest Test in Decades

TEL AVIV-Israel's most critical alliance is confronting its toughest test in decades after midterm elections brought to power more Democrats who question U.S. support for the country and led Republicans from President Trump on down to call for a recalibration of the relationship.

Israel has long prepared for a changed alliance with the U.S., one that relies less on its most important ally. Now, Israelis are seeing their relationship with America change faster than they expected.

Gulf Airports Built to Connect the World Are Now in the Crosshairs

The Gulf states have bet hundreds of billions of dollars that building airports between the major air markets of Europe and Asia will let them grow into the world's dominant aviation hubs.

Geography is now working the other way. The same positioning that puts the Gulf within a four-hour flight of one-third of the world's population also leaves it well within range of missile attacks from Iran and its militia allies from around the region.

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

(END) Dow Jones Newswires

November 06, 2026 05:20 ET (10:20 GMT)