Tech under pressure on AI funding worries, ECB and Fed in focus

Macro & central banks

• The IMF says the ECB will likely need at least one more 25 basis point hike in 2026, after increases in June and September, driven by higher energy prices linked to the war against Iran.
• Fed Chair Kevin Warsh is not offering rate guidance before the October meeting, while pointing to growing inflation pressures.
• On Friday, he said AI could boost productivity over the medium term, while flagging uncertainty over jobs and market structure.
• The French 10-year yield fell 9 basis points on Thursday to 4.79%, after touching 4.92% on October 1, its highest level since 2002.
• Italy's trade surplus narrowed to 1.773 billion euros in August from 1.875 billion a year earlier, with exports up 9.0% and imports up 9.7% year on year.

Indices & tech

• The CAC 40 gained 0.78% on Thursday to close at 7,934.70 points, up 3.3% from its October 8 low of 7,679.36. Paris benefited from its limited exposure to the companies most tied to AI.
• Hermès and L'Oréal each rose more than 3%, while STMicroelectronics and Schneider Electric finished at the bottom of the index.
• US index futures were slightly above flat on Friday morning, after Wall Street rose the previous session.
• Some investors are lowering their valuations ahead of Anthropic's potentially very large IPO. Taiwan is also reportedly considering tighter export controls on AI chip sales to China.

Stocks & geopolitics

• FMC sharply cut its third quarter 2026 outlook: revenue between 65 and 125 million USD against about 870 million expected, and an adjusted EBITDA loss between 510 and 565 million USD. The stock fell 30.53% on Thursday to 5.62 USD.
• Eutelsat dropped 10.66% on Thursday to about 1.51 euros, after a 23.33% jump the day before. Ukraine said Starlink connectivity for its armed forces had been fully restored.
• Donald Trump is considering new strikes on Iran, including on the Pickaxe mountain site. Houthi forces attacked a palace in Aden, killing five people according to the Yemeni government cited by the press.
• Germany approved a higher tobacco tax (over 12 billion euros between 2027 and 2030) and a sugar tax from July 2027 (690 million euros in 2027, 925 million in 2028).

What to watch today

• The Fed's October policy meeting, whose date is not specified in the sources, and any further comments from Kevin Warsh.
• The US open, which will be sensitive to AI headlines and technology stocks.
• Developments in the Iran conflict and their effect on energy prices, which feed into rate expectations in Europe.
• The French 10-year yield, which remains close to its recent elevated levels.