European equities opened with slight gains, counteracting minor declines from the previous day. Index changes include Eurostoxx, Germany’s DAX, and France’s CAC 40, each up by 0.2%, while the UK’s FTSE rose 0.3%. Spain’s IBEX remained unchanged, and Italy’s FTSE MIB decreased by 0.1%.

The slight rise in European stocks mirrors a late recovery in Wall Street markets. However, any positive sentiment is tempered by a 0.35% drop in S&P 500 futures. Trade uncertainty persists, and upcoming US-EU discussions may impact European indices later in the week.

European Stock Movement

This morning’s upward movement in European stock indices follows a soft bounce from the sell-off we observed previously. While the uptick is not dramatic, it does reflect an attempt by markets to stabilise after the subdued tone on Tuesday. The leading indices—those tracking broader regions like the Eurozone or specific heavyweight economies such as Germany and France—barely moved more than a third of a per cent. The UK’s benchmark added a bit more, slightly outpacing its continental peers. Spain’s flat performance and Milan’s minor downtick suggest selective positioning rather than consistency across national markets.

Yesterday’s evening session in the US helped to stabilise risk sentiment—but just about. The S&P 500 managed an intraday pullback off its lows, hinting at buyers tentatively stepping back in. Yet, the futures market isn’t buying into sustained upside, as we wake up to red prints ahead of the US cash open. A 0.35% slide in futures this morning puts pressure on risk appetite, particularly in the absence of fresh catalysts.

This environment is being shaped, in large part, by policy noise rather than economic data. Talks between the United States and European Union remain unsettled. There is still measurable tension around trade alignment, tariffs, and subsidy frameworks, all of which weigh on forward-looking equity multiples in Europe. While nothing has broken materially, desk chatter points to an unwillingness to extend risk given the low conviction setup.

Trading Strategies

For those of us navigating index derivatives, patience remains a valuable commodity. The lack of volatility expansion on the open—despite fresh headlines overnight—tells us there’s an underlying wait-and-see behaviour. What we’ve seen more of is option activity skewed to the downside along the 1-2 week horizon, which matches the cautious tone. Ultimately, we’re watching for delta shifts around options maturities, particularly at the end of this week when large notional exposures start to roll.

Volumes are still lighter than average, though this is not uncommon ahead of pre-scheduled policy encounters. It will only take one out-of-consensus comment to force repositioning. In the meantime, short-term exposures remain key. Trading the intraday moves—rather than leaning aggressively into directional bias—has proved more effective. Watching the move in implied vols late in yesterday’s New York session told us a fair bit; the quick fade after the initial knee-jerk bid implied no one is yet preparing for a major dislocation. That may not last.

Be selective. Tighten stops. Know your gamma in the post-noon CET window when US flows begin filtering into the book. It’s there that spreads begin to widen and more erratic price action has surfaced in recent sessions. Prices may look stable on the surface, but the tape remains twitchy under pressure.

Create your live VT Markets account and start trading now.