European stocks gain as US futures recover from steep losses

European shares started the session on a positive note, with broad gains recorded after the first hour of trading, as US futures extended their recovery from steep earlier declines. The opening-hour performance is as follows:

• Eurostoxx +0.8%
• Germany DAX +0.5%
• France CAC 40 +0.5%
• UK FTSE +0.4%
• Spain IBEX +1.7%
• Italy FTSE MIB +1.3%

At the same time, S&P 500 futures and Nasdaq futures gained 0.2% and 0.1% respectively. The recovery in Nasdaq futures is notable, given they had fallen more than 2% earlier in the session.

The initial response to the US midterm election outcome was negative, as a Democratic sweep sparked worries about stricter AI rules and possible limits on data centre growth. This leaves investors in a difficult position, particularly because the AI spending surge has been a major driver of this year's market rise.

The rebound is certainly encouraging for the moment, but given the lingering uncertainty around AI infrastructure spending, there is a gap between markets catching their breath and investors being willing to dive back into riskier positions.

The recovery in US futures is at least allowing broader risk appetite to move past the earlier negativity. But Wall Street's showing later in the day will be the more significant indicator of whether the rally can hold.