Stocks Struggle as Europe Woes Dent Risk Appetite: Markets Wrap

(Bloomberg) — Global stocks struggled for direction as political upheaval and mounting concern over Europe’s public finances dampened risk sentiment and sent the euro to a 17-month low against the dollar.

Markets are starting the week with strains in Europe firmly in focus after policy gridlock in France sparked a selloff in the region’s more vulnerable debt. The unease threatened to spread to Spain on Monday as Prime Minister Pedro Sánchez called an early election amid mounting social protests over housing.

Currency markets showed the biggest reaction as the euro dropped 0.4% against the dollar. German bunds affirmed their haven appealfor bond investors, with the 10-year yield steady while yields on French, Italian and Spanish counterparts climbed. Treasuries were marginally weaker at the long end.

In equities, S&P 500 futures were down 0.2%. The Nasdaq 100 was poised open modestly below the record high reached at the end of last week. The CAC 40 in Paris was the main weak spot in Europe. Asian stocks played catch-up with Friday’s US rally.

“Europe is out of favor with investors and bond market vigilantes are watching developments in the euro zone closely,” said Kathleen Brooks at XTB. “The question now is, will Spain be next?”

Brent crude fluctuated around $102 a barrel as traders remained wary of disruptions to Middle East flows. While Saudi Arabia cut prices of its benchmark grade to Asia, the kingdom’s state producer warned about the risk of low stockpiles and fighting in Yemen intensified.

Meanwhile, Brazilian assets were set to jump after Senator Flávio Bolsonaro finished ahead of President Luiz Inácio Lula da Silva in the first round of the election. Bolsonaro, seen as a more market-friendly name than Lula, had 47% of the vote, compared with the incumbent’s 45%.

Fabrício Taschetto at Ace Capital saw the real strengthening some 3%. Retailers, homebuilders, shopping-mall operators and consumer and apparel companies were set to lead the rally, according to Felipe Arslan at Morada Capital.

Minutes from the Federal Reserve’s September meeting count among the highlights of a week with a relatively sparse economic calendar. Since policymakers raised rates at that meeting, investors have dialed back bets on a second straight increase following softer US jobs data and weaker-than-expected inflation.

While markets remain fragile, many stocks have already priced in the risk from higher oil and tighter financial conditions, said Alberto Tocchio, a portfolio manager at Kairos Partners.

“If oil stops rising and bond volatility calms, the next move could be less about another Nasdaq-high and more about a much healthier broadening of market participation,” Tocchio said. “France is clearly the main European risk. For now, however, I would still view this primarily as a French rather than a systemic euro-area crisis.”

Corporate Highlights:

Taiwan’s United Microelectronics Corp. is seeking to raise $1.8 billion in dual-tranche convertible bonds, according to terms of the deal seen by Bloomberg News. Schneider Electric SE agreed to buy industrial software firm PTC Inc. for about $22.6 billion, stepping up its effort to tap into the artificial-intelligence boom with its biggest acquisition to date. Nvidia Corp. partner Hon Hai Precision Industry Co. reported better-than-expected quarterly revenue, signaling sustained and elevated spending on global AI infrastructure. SoftBank Group Corp. chief Masayoshi Son — one of AI’s fervent believers — said that even he’s worried about safety risks as machines quickly gain more abilities. Some of the main moves in markets:

Stocks

S&P 500 futures fell 0.2% as of 6:31 a.m. New York time Nasdaq 100 futures fell 0.3% Futures on the Dow Jones Industrial Average fell 0.2% The Stoxx Europe 600 rose 0.2% The MSCI World Index was little changed Currencies

The Bloomberg Dollar Spot Index rose 0.1% The euro fell 0.4% to $1.1206 The British pound was little changed at $1.3228 The Japanese yen was little changed at 157.97 per dollar Cryptocurrencies

Bitcoin rose 0.3% to $86,038.96 Ether rose 0.4% to $2,716.85 Bonds

The yield on 10-year Treasuries advanced one basis point to 5.29% Germany’s 10-year yield was little changed at 3.47% Britain’s 10-year yield advanced four basis points to 5.40% Commodities

West Texas Intermediate crude fell 0.5% to $90.67 a barrel Spot gold rose 0.4% to $4,158.30 an ounce This story was produced with the assistance of Bloomberg Automation.

©2026 Bloomberg L.P.