European shares open mixed, Spain lags, US futures drop

European equities were mixed at the opening bell on Wednesday, with most benchmarks posting modest gains as Spanish stocks continued to underperform. Sentiment stayed cautious, particularly as US futures signalled a weaker open on Wall Street. The early moves were as follows:

• Eurostoxx -0.1%
• Germany DAX +0.3%
• France CAC 40 +0.7%
• UK FTSE 100 +0.4%
• Spain IBEX -1.0%
• Italy FTSE MIB -0.4%

Spain remained the outlier, with the IBEX slipping another 1.0% after a 1.5% drop the previous day pushed the index to a three-month trough.

Spanish banking stocks have been weighing heavily recently. Santander fell 5.6% on Tuesday even after reporting a 19% increase in profits. The fallout from Brazil's election shock is still being felt, with Lula's victory stoking fears of aggressive public spending and fiscal deterioration there. That has triggered a selloff in several large Spanish multinationals exposed to Brazil, including Santander, Telefónica and Mapfre.

For the wider market, the European Central Bank's policy decision later on Wednesday is a key event to navigate. But a more worrying signal is coming from across the Atlantic. S&P 500 futures were down 0.4% and Nasdaq futures slumped 1.2% after Alphabet's earnings revived concerns about the huge spending commitments tied to AI development.

The sharp post-earnings decline in Alphabet shares has put tech stocks back on edge, even though Microsoft's results provided a more encouraging picture. With Amazon earnings still ahead, investors have little breathing room heading into the final stretch of the week.

For now, European stocks are holding up relatively better than their US counterparts, but it is still early in the session. That could change as the day goes on, particularly if the tech selloff intensifies and weighs on broader sentiment.