European stocks opened mostly lower on Monday as another surge in oil prices and growing bets on a Federal Reserve rate hike this week weighed on risk sentiment. The DAX and CAC 40 slipped while the FTSE bucked the trend, and European tech shares fell after Anthropic's CEO urged AI firms to slow their pace of development.
European equities opened mostly lower on Monday, pressured by a fresh jump in oil prices and mounting bets on a Federal Reserve rate hike later this week. The Eurostoxx fell 0.6%, Germany's DAX slipped 0.3% and France's CAC 40 dropped 0.4%, though the UK's FTSE bucked the trend with a 0.3% gain.
Oil surge deepens inflation worries
Brent crude traded above $107 a barrel while WTI crude climbed above $102, after renewed attacks on Saudi energy infrastructure and further threats to shipping routes around the Middle East. Oil prices surged more than 2% after new Houthi strikes on Saudi Arabia and Iranian attacks on ships in the Gulf, compounding supply concerns following the closure of a key Saudi oil pipeline. That kept inflation pressures elevated, but the European energy sector bucked the weakness, rising 0.4% as most other STOXX sectors traded lower.
Tech shares slide as AI leaders urge caution
European technology shares fell 1.4%, in line with weakness among Asian peers, after Anthropic CEO Dario Amodei called on AI companies to slow the pace at which they advance model capabilities over fears of misuse. Germany's Infineon shed 5.8%, while Dutch firms ASML and ASMI lost 4.4% and 5%, respectively. The pan-European STOXX 600 was little changed at 638.95 points as of 0810 GMT, even as most major regional bourses traded lower.
Fed decision looms as yields near 5%
Markets are now pricing roughly an 87% probability of a Fed rate hike, following hotter US inflation data and the latest jump in energy prices. US 10-year Treasury yields are hovering close to 5%, adding another valuation headwind for equities ahead of the Fed's decision on Wednesday. Traders are increasingly betting on a 25-basis-point increase. The European Central Bank lifted interest rates last week.
S&P 500 futures were down 0.6% and Nasdaq futures fell around 1.5%, reflecting the same risk-off mood as the US dollar rose, stocks fell and precious metals also dropped.
Sources: Investinglive, Reuters via Investing.com
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