European equity markets opened the week cautiously after Friday's rebound. The Swiss Market Index (SMI) inched up 0.06%, while Germany's DAX held at 25,396 points and the EuroStoxx50 at 6,294 points around midday. Futures for the major U.S. indices were in negative territory.
Oil prices climbed roughly 3.5% after U.S. President Donald Trump rejected Iran's conditions for reopening the Hormuz Strait, a key route for oil and gas shipments. Brent crude rose to $108.03 per barrel and U.S. West Texas Intermediate to $95.64.
Geopolitical risk in the Middle East remained elevated, with continued attacks by Yemen's Houthi rebels on Saudi Arabia. Preliminary data from Kpler showed September oil exports from the region reached their highest level since the conflict began in February, aided by modest increases through the partially blocked Hormuz route. Some analysts warned that overall market supply still faces a deficit.
Higher oil prices reinforced upward pressure on bond yields. The yield on Germany's 10‑year bund rose to 3.649% and the U.S. 10‑year Treasury to 5.234%, each setting new 17‑year and 19‑year highs respectively.
Technology stocks retreated, with German chipmakers Infineon, Aixtron and Siltronic each slipping between 1% and 2%. The broader European tech index fell more than half a percent. Analysts linked the decline to OpenAI's announced pause in training its latest AI model and lingering doubts about the rapid return on massive investments in AI data centres.
In contrast, British house‑building firms rallied between 10% and 15% after the UK government signalled a new equity‑loan programme for first‑time homebuyers in the upcoming budget. Shares of Persimmon, Barratt, Taylor Wimpey and Vistry led the gains.