By Harshit, London, October 3, 2025 – 8:30 AM BST
European Markets Build on Weekly Gains
European stocks are set to open higher on Friday, continuing a strong week for regional equities. The pan-European Stoxx 600 gained 0.5% in Thursday’s session, reaching a record high before closing, marking its fifth consecutive day of gains. The index is on track to end the week up more than 2%, reflecting growing investor optimism in the region.
Futures for London’s FTSE 100 were last seen 0.2% higher, while Germany’s DAX and France’s CAC 40 futures were up 0.2%, and Italy’s FTSE MIB futures traded 0.3% higher.
Tech Stocks Lead the Rally
Much of Europe’s positive momentum has been driven by technology shares. The Stoxx Europe 600 Technology index is poised for a weekly gain of 4.9%, following a 2.3% increase on Thursday. Investor enthusiasm was boosted by a recent OpenAI share sale, which valued the privately-owned AI company at $500 billion, reviving interest in the broader tech sector.
“Tech investors are regaining confidence after a strong wave of AI-related enthusiasm,” said a London-based market strategist. “European tech stocks have mirrored the global sentiment, contributing significantly to the week’s rally.”
U.S. Government Shutdown Adds Uncertainty
Despite the optimism in European markets, investors remain wary of the ongoing U.S. government shutdown, now entering its third day. U.S. Treasury Secretary Scott Bessent warned in a CNBC interview Thursday that the shutdown could dampen economic growth.
“The current impasse in Washington is a risk to growth and confidence,” Bessent said. “Prolonged closure could affect both GDP and working Americans if federal operations remain stalled.”
The shutdown has already delayed key data releases, including the September jobs report, creating uncertainty for global investors monitoring the U.S. economy.
European Defense and Geopolitical Developments
Regional security issues also influenced investor sentiment. Earlier this week, European leaders met in Copenhagen to discuss the possibility of constructing a drone wall to prevent Russian aircraft from violating airspace. Defense companies welcomed the initiative, citing potential opportunities for regional security contracts.
On Friday, Munich Airport briefly closed due to drone sightings, prompting temporary flight suspensions, according to Reuters. While the incident was short-lived, it underscores ongoing security concerns that could impact transportation and defense sectors in Europe.
Upcoming Economic Data
Investors are also awaiting several key economic releases on Friday, including the latest Swiss inflation print and the euro zone unemployment rate for August. These figures could influence market expectations for European central bank policy and broader economic stability.
Meanwhile, overnight trading in Asia was mixed, reflecting cautious sentiment amid global uncertainty, while U.S. stock futures were largely unchanged Friday morning.
Outlook and Analysis
European equities have demonstrated resilience amid global volatility, led by technology and defense-related stocks. However, the ongoing U.S. government shutdown and geopolitical tensions continue to inject caution into markets. Analysts note that while the short-term momentum is strong, sustained gains will depend on resolution in Washington and broader economic data supporting growth.
“Markets are balancing optimism in tech and European equities with caution over U.S. policy uncertainty,” said a Frankfurt-based economist. “Investors are closely watching developments on both sides of the Atlantic before making larger commitments.”
