Stock markets: sharp falls return as tech shares and crude oil prices plummet

(Il Sole 24 Ore Radiocor) – European stock markets are losing ground again, following the mixed results from the leading US big tech firms, which have failed to impress. Overnight, the market resumed selling off shares in the sector following the previous day’s gains. Oil prices are not helping either, with Brent crude back above $111 a barrel and WTI trading just below $100, whilst tensions in the Middle East show no sign of easing. The US military is reportedly preparing a range of options to strike Iran, according to the Wall Street Journal. Tension remains high in the bond market as well, particularly in France, where the yield on the 10-year OAT has remained around 5 per cent since yesterday – for the first time since 2002 – amid fears over the protests, which are now affecting several European countries, and the budget issue. Consequently, in Milan, the FTSE MIB is trading lower, alongside Paris (CAC 40) and Frankfurt (DAX 40).

Whilst Meta’s figures (which saw an increase in capital expenditure and guidance, with a greater focus on AI) won over the market, Tesla’s did not: the share price fell by more than 4 per cent in after-hours trading. ‘It is no coincidence that there was the spectacular unveiling of the Roadster, or the last-minute announcement of SpaceX’s quarterly results (initially scheduled for 3 November), where there was talk of a merger between SpaceX and Tesla, the true and only driving force behind Tesla’s recovery, a company whose figures are completely at odds with its fundamentals, such as a price-to-earnings ratio still above 300”, says David Pascucci of XTB. We’ll have to wait until next week for the figures from the other big tech firms, whilst the quarterly results season continues with a flurry of results, including those from Procter & Gamble, Lockheed Martin, Spotify, Comcast and Barclays.

On the Milan Stock Exchange, selling pressure is once again weighing on tech shares, starting with Technoprobe, Prysmian and Stmicroelectronics. Also down were Stellantis, which recorded a 4.5 per cent rise in European registrations in September, compared with a 10 per cent rise for the market as a whole. Banking and oil stocks were also weak, including Eni, despite further rises in crude oil prices, whilst energy companies are discussing the possibility, reported by Il Sole 24 Ore, of a tightening of IRAP in the Budget Law. Also performing well are Telecom Italia and Telecom Italia and https://vwd-proxy.ilsole24ore.com/FinanzaMercati/api/TickerInfo/Redirect/MONC.MI" title="MONC.MI-Moncler" data-ticker="MONC.MI" target="_blank">Moncler, which is benefiting from improved financial results and a strong performance on the Asian markets.

Oil prices are rising again, as we were saying, whilst, according to media reports, the US military is reportedly preparing for an offensive against Iran. This is despite statements by President Donald Trump to the effect that Washington will not attack Tehran before the mid-term elections on 3 November. According to the WSJ, two aircraft carrier strike groups are currently in the Middle East, whilst a third is en route to the region from the Pacific.

Turning then to other commodities, the price of natural gas remains high: the Amsterdam TTF has in fact risen to over 88 euros per megawatt-hour, still hovering around its highest levels since 2022. This comes as Moscow, in recent days, has opened the door to three-way talks with China and Russia regarding the war in Ukraine. On the currency front, the euro stands at 1.124 dollars (up from 1.1232 at yesterday’s close). The yen, however, is strengthening against the euro to 176.6 (from 177.5) and against the dollar to 157.1 (from 158).