Markets
London's FTSE 100 Gained 3.1% in the Week the Nasdaq Lost 4.5%. Europe Has Almost No Chips to Sell
The FTSE 100 closed at 10,881.90 on October 16, up 3.13% on the week, the DAX rose 2.13% to 25,622.61 and the Stoxx 600 2.09% to 644.74. Eurozone inflation was confirmed at 3.8% for September, with energy prices up 18.8% from a year earlier.
Europe had its best week in months while Wall Street had its worst since June, and the explanation is in the index weightings. The FTSE 100 rose 0.38% on Friday to 10,881.90 and 3.13% on the week, finishing about 1% below its highest level of the past three months. Germany's DAX gained 0.95% on Friday to 25,622.61 and 2.13% on the week; the Stoxx Europe 600 added 0.72% to 644.74 and 2.09%; the CAC 40 rose 0.28% to 7,956.70 and 1.97%. Over the same five days the Nasdaq lost 4.48% and the Philadelphia Semiconductor Index 11.41%.
The difference is what the indexes contain. Semiconductors and AI infrastructure are a small part of European benchmarks: ASML in Amsterdam, a handful of equipment and software names, and little else. The FTSE 100 is oil majors, banks, miners, pharmaceuticals and consumer staples, which is almost exactly the list of sectors that rose in the United States last week while technology fell 7.70%. Brent crude settling at $109.86 on Friday, up 4.91% on the week, is a problem for a Nasdaq investor and a dividend for a FTSE one.
The inflation picture is not better than America's. Eurostat confirmed on Friday that euro-area inflation was 3.8% in September, up from 3.2% in August and 2.2% a year earlier, with energy prices 18.8% higher than a year before compared with 14.3% in August. Core inflation, which strips out energy, food, alcohol and tobacco, was 2.5% on the flash estimate. The next flash reading, for October, is due on November 4, and the European Central Bank's own meeting falls on October 29, the day after the Fed's.
Company news helped at the margin. Schneider Electric raised its 2026 profit and revenue targets for the second time this year on data-centre demand, a reminder that Europe sells the electrical equipment the AI build-out needs even if it does not sell the chips; the stock gave back an early 2% gain but the sector held. Banks, which benefit from higher rates for longer, and defence contractors added to the week's gains.
None of this makes European stocks immune. The Stoxx 600 is still 2.8% below its three-month high of 663.41, and a US recession scare would reach Frankfurt within hours. But for a week in which the question was what to own instead of AI, the answer turned out to be an index that never owned much of it. The euro ended the week near $1.12, little changed.