European Midday Briefing: Stocks Rise as Investors Rotate Away from AI

MARKET WRAPS

European shares were rising Thursday as investors rotated away from artificial intelligence stocks following overnight jitters sparked after The Wall Street Journal reported that Nvidia's board could oust chief executive Jensen Huang.

Though Morningstar said the potential ouster of Nvidia's CEO is unlikely to hurt the company's medium-term financial growth, the uncertainty at the top of the company, according to Saxo Bank, could accelerate a shift toward alternative suppliers.

After the opening bell, the continent's tech sector was the worst-performing, while healthcare stocks rallied. European chip makers fell sharply, with makers of semiconductor manufacturing equipment also posting losses. ASML, Europe's most valuable company, dropped about 2%.

Approaching midday, the FTSE 100, the CAC 40 and the DAX were gaining. The pan-European Stoxx 600 index was trading at record highs.

Economic Insight

Jefferies said it expects the European Central Bank and the Federal Reserve to raise interest rates in December, but falling oil prices could pause rate hikes in 2027.

"We are not yet seeing second round effects from energy prices. Any potential second round effects between now and March would determine whether we can get one additional precautionary hike (beyond the December one) from the Fed or the ECB."

U.S. Markets:

Stock futures pointed to a mostly lower open Thursday, as the prospect of Nvidia ousting its chief executive reverberated. With Nvidia shares down more than 5% ahead of the opening bell, Nasdaq futures were in the red. Futures for the Dow were up, but those of the S&P 500 were down.

Forex:

The dollar's recent rapid appreciation could have further to go, KBC Bank said after the DXY dollar index reached a 19-month high. The DXY last traded flat while the euro fell below key support.

The euro traded flat against the dollar, and ING said the EU's single currency was at risk of falling below $1.10 in coming days.

Sterling was little moved after better-than-expected U.K. GDP data for September. The currency was down against the dollar and was flat against the euro.

Bonds:

Treasury yields rose as the dollar remained elevated on expectations for further interest-rate hikes by the Federal Reserve. Eurozone and U.K. bond yields, meanwhile, fell modestly.

The 10-year OAT-Bund yield spread was last at 147 basis points and further tightening could prompt shorting by Jefferies. If the yield spread falls below 140 basis points "we would be inclined to have a short France versus Germany view."

Pressure on bond yields will remain upward, Franklin Templeton Fixed Income said, expecting that continued loose fiscal policy will keep generating substantial funding requirements.

"Adding about 1 percentage point of term and risk premium would give us a fair value of 5%-5.50% for 10-year U.S. Treasurys," it said, adding that "any slack in funding demand created by a potential slowdown in AI infrastructure is likely to be taken up by investment in other sectors of the economy. Upward pressure on yields is therefore likely to persist."

Quoniam recommends investors to go long German Bunds and short Treasurys, arguing economic concerns across the euro-area serve as a structural brake on how aggressively the European Central Bank can raise rates.

Energy:

Oil prices fell as traders looked to diplomatic efforts to resolve conflicts in both the Middle East and Ukraine. U.S. Vice President Vance was considering direct talks with Iran to help end the war.

Metals:

Gold contracts fell back below $4,000 a troy ounce.

EMEA HEADLINES

This Shipping Lane Is Now the World's Deadliest. It Isn't Hormuz.

The deadliest body of water this year isn't the Strait of Hormuz. A series of attacks in the Black Sea has killed more people than strikes on shipping so far in the war between Iran and the U.S., disrupting trade routes and turning up the heat on NATO.

Russian forces have targeted commercial ships carrying food exports from Ukraine out into the Black Sea. Ukraine, too, has attacked Russian shipping on the other side of the sea with drones.

OPEC's Oil Production Nears Prewar Levels on Saudi Rebound

OPEC members boosted crude output toward prewar levels in October as alternative pipelines and other workarounds became a vital lifeline, allowing Saudi Arabia and other major producers to export more oil despite persistent threats to critical shipping routes.

Crude output from the Organization of the Petroleum Exporting Countries rose by 1.96 million barrels a day to 27.16 million barrels a day last month, compared with 28.63 million in February, before the Iran war began. Saudi Arabia-the cartel's de facto leader-increased production to 10.56 million barrels a day from 8.37 million in September, according to OPEC's latest data.

Siemens Energy Shares Jump on Steeper Profit Targets Through 2030

Shares in Siemens Energy rose after the company said it was targeting sales growth and a jump in profitability in new midterm targets covering the next four years.

In European morning trade, shares in the German maker of energy equipment were 7.7% higher at 129 euros after a record fiscal 2026. Shares had been trading broadly flat over the year to date before the jump.

GLOBAL NEWS

Dovish BOJ Member Urges Caution in Raising Rates Further

The Bank of Japan needs to tread carefully when tightening policy, board member Toichiro Asada said, warning about the risk of higher interest rates hurting economic growth.

"Downside risks to the economy posed by a policy rate hike will gradually increase if the continued rate hikes have tightened financial conditions or have reduced the degree of accommodation," Asada told business leaders in the southern Japanese city of Nagasaki on Thursday.

China's Central Bank Signals Easing Restraint as Growth Holds Up

China's central bank gave little away in its latest quarterly report, but analysts' key takeaway is that no rate cuts are on the near-term horizon.

The People's Bank of China reiterated its commitment to maintain a pro-growth, accommodative policy stance, while again stating its concern about the risk of too-low rates.

The Spread of Cheaper Ballistic Missiles Rips Up Decades of Military Thinking

MANAMA, Bahrain-Technological advances making ballistic missiles cheaper and more precise have allowed Iran and the Houthis of Yemen to strike foes across the Middle East.

The development and spread of these weapons, once the preserve of nuclear superpowers, mean that military doctrines around the globe will need profound change-fast.

Scott Colom Wins Mississippi Senate Seat in Historic Victory

Scott Colom won a long-shot bid to oust Mississippi's Republican incumbent senator, the Associated Press said, part of a powerful blue wave that propelled Democratic candidates to victory across the country in the midterm elections.

Colom, a local prosecutor, is the first Democrat that Mississippi has elected to the Senate since 1982 and the first Black senator from the state since the Reconstruction era that followed the Civil War.

House Braces for Another Jeffrey Epstein Vote

WASHINGTON-Democrats and a small number of House Republicans have succeeded in forcing a new vote later this year on files related to sex offender Jeffrey Epstein, gathering enough signatures for a measure that would let states and survivors sue the Justice Department over documents it has withheld.

The bipartisan effort, led by Republican Rep. Thomas Massie of Kentucky and Democratic Rep. Ro Khanna of California, reached the required 218-signature threshold Wednesday after Rep. John Garamendi (D., Calif.) signed on to the proposal, following Rep. Adam Smith (D., Wash.) earlier this week.

Hegseth and Aides Are Reprimanded During Veterans Day Event

A U.S. Army soldier guarding the Tomb of the Unknown Soldier loudly admonished a group of dignitaries that included Defense Secretary Pete Hegseth after some of the visitors were observed laughing and chatting near the memorial on Veterans Day.

The episode Wednesday followed a ceremony at Arlington National Cemetery. It came as Democratic lawmakers are discussing whether to renew their push to impeach Hegseth after a new Congress is sworn in next year.

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

(END) Dow Jones Newswires

November 12, 2026 05:19 ET (10:19 GMT)