Global Markets React to European Political Turmoil and Mixed U.S. Data
Global markets on October 6, 2026, saw a mix of gains and volatility driven by political developments in Europe and mixed economic data from the U.S. The Nasdaq Composite surged 1.05% to close at a record high of 27,477.31, marking its 23rd record close of the year. The S&P 500 also rose 0.7% to 7,773.95, while the Dow added 0.2% to 51,267.90. Tech giants like Nvidia, Microsoft, Meta, and Tesla led the gains, with PTC surging 33.5% after Schneider Electric announced a $22.6 billion acquisition.
Political turmoil in Europe weighed heavily on markets. France's deepening fiscal and political gridlock caused OAT-Bund spreads to widen to multi-year highs before domestic buyers intervened. Spain's Prime Minister called a snap election, adding to the region's political risks. Germany's composite PMI for September provided a rare bright spot, reaching its highest level since before the Middle East conflict began in February. Meanwhile, Iran's refusal to fully reopen the Strait of Hormuz until the U.S. meets seven conditions kept geopolitical tensions elevated in energy markets.
In forex, the U.S. dollar gained strength against European currencies amid fiscal and political stress. The euro hit a 17-month low against the dollar before closing at 1.1222. The British pound also softened, while the Australian dollar outperformed its G10 peers. The yen remained range-bound around 157.9 against the dollar. Commodities saw mixed performance, with WTI oil extending losses to below $90 per barrel due to Saudi Aramco's price cuts and rising Gulf exports. Gold steadied near $4,140 per ounce, supported above $4,100 but facing headwinds from rising real yields and dollar strength.
U.S. Treasuries experienced a bear-steepening selloff, with the 10-year yield rising to 5.34% and the 30-year yield touching 5.70%. European sovereign debt spreads saw some narrowing as domestic buyers stepped in. Goldman Sachs noted that conditions for lower yields, such as weak jobs data and dovish Fed commentary, were beginning to emerge. In Asia, markets rallied, tracking U.S. tech gains and softer payrolls data, with Japan's Nikkei surging 2.5% and Hong Kong's Hang Seng set to open higher.