Tech Weakness and Policy Jitters Cool Global Equity Momentum – Europe Market Wrap

Global equities faltered as investors digested underwhelming results from artificial-intelligence bellwether Palantir Technologies Inc. and fresh warnings from Wall Street executives about stretched valuations.

After a string of narrow, tech-driven advances that powered the S&P 500 to recent highs, futures on the benchmark fell 0.9% as the “Magnificent Seven” megacaps lost momentum. Tesla Inc. and Nvidia Corp. led declines in premarket trading, dragging Nasdaq 100 contracts 1.2% lower.

The dollar extended its rally to the strongest level since May, buoyed by mixed commentary from Federal Reserve officials on the future path of interest rates. Treasuries rebounded, with the 10-year yield slipping two basis points to 4.09%, while gold declined for a third session and Bitcoin approached its lowest level since June.

In the UK, gilts outperformed European peers after Chancellor Rachel Reeves signaled that further tax increases may be necessary to ensure fiscal discipline in the upcoming budget. Reeves underscored the need to tame inflation and control borrowing, reinforcing expectations of a tighter fiscal stance. The 10-year gilt yield fell to 4.41%, while the pound weakened as traders priced in a faster pace of Bank of England rate cuts.

Across Europe, stocks slipped 0.8%, extending the cautious tone that spread from US futures. The risk-off sentiment hit commodities, sending copper down more than 2% and Brent crude hovering near $64 a barrel.

Fed officials’ remarks on Monday added to the policy uncertainty clouding markets. Austan Goolsbee highlighted the persistence of inflation pressures, while Lisa Cook pointed to growing vulnerabilities in the labor market. Mary Daly reiterated that policymakers should “keep an open mind” on another rate cut, and Stephen Miran emphasized that monetary policy remains restrictive, underscoring the internal divisions ahead of the Fed’s December meeting.