European stocks slide at October start; DAX holds support, FTSE breaks below

The opening session of October saw European shares finish substantially lower, with all five primary benchmarks losing ground. Germany's DAX ended just above its crucial 200-day moving average, offering buyers a reference point to defend. The UK's FTSE 100, in contrast, was unable to keep its recovery above that same technical line and closed underneath it.

Closing figures were as follows:

• German DAX: 24,939.36, down 259.84 points or 1.03%.
• France's CAC 40: 7,835.32, down 129.20 points or 1.62%.
• UK FTSE 100: 10,428.26, down 177.75 points or 1.68%.
• Spain's IBEX 35: 19,005.30, down 420.90 points or 2.17%.
• Italy's FTSE MIB: 50,237.86, down 1,134.11 points or 2.21%.

DAX: buyers lean against the 200-day moving average

During the day the DAX dropped to a low of 24,831.60, a whisker above its 200-day moving average of 24,828.76. Purchasers came in at that level, helping the index cut into its losses before the close.

That moving average continues to stand as a major support level ahead. Remaining above it gives buyers a base for a rebound; falling under would signal a more bearish technical stance.

Holding support, though, is only the beginning. The index stays beneath its 100-day moving average at 25,375.46, while the 100-hour average near 25,447 and the 200-hour average near 25,576 add further resistance.

To regain control, buyers must push above and remain above those levels. Until then, the bounce is just a recovery within the recent downward move.

FTSE 100: buyers had their chance, but couldn't keep it

The FTSE 100 slipped under its 200-day moving average at 10,451.85, recovered back above it, but that bounce did not hold. By the close it had slipped back under that level, concluding at 10,428.26.

That leaves the balance in the sellers' favor. The immediate downside objective is 10,327.75, the 50% midpoint of the advance from the March 2026 low.

For buyers, the first condition is a sustained move back above 10,451.85. Until that occurs, sellers keep the upper hand and the midpoint target remains relevant.

12:30 PM ET: European yields diverge; U.S. Treasury yields fall

Ten-year yields in Europe were mixed. German and UK yields moved lower, while French and Italian yields advanced, widening their spreads to German paper.

• Germany: 3.496%, down 8.6 basis points.
• France: 4.932%, up 7.1 basis points.
• UK: 5.393%, down 4.2 basis points.
• Spain: 4.149%, up 0.5 basis points.
• Italy: 4.691%, up 6.6 basis points.

U.S. stocks trade modestly lower

Major U.S. stock indexes were a touch down, though the Russell 2000 outperformed with a small advance.

• Dow industrials: 50,843.07, down 68.02 points (-0.13%).
• S&P 500: 7,647.88, down 3.66 points (-0.05%).
• Nasdaq Composite: 26,823.65, down 37.41 points (-0.14%).
• Nasdaq 100: 30,372.10, down 36.42 points (-0.12%).
• Russell 2000: 2,804.20, up 7.33 points (+0.26%).

U.S. bonds rally, with shorter-term yields leading the decline

Treasury yields fell sharply, the largest decreases concentrated at the short end of the curve.

• 2-year yield: 4.7914%, down 9.56 basis points.
• 5-year yield: 5.0089%, down 8.01 basis points.
• 10-year yield: 5.2343%, down 5.87 basis points.
• 30-year yield: 5.5954%, down 4.36 basis points.

The bigger drop in short-term yields steepened the Treasury curve. Despite the comfort offered by lower yields, the primary U.S. equity gauges stayed slightly negative. Markets now assign a 30% likelihood to a Federal Reserve rate hike at its October meeting, a sharp retreat from the 54% seen just two days ago.