European Stocks Set for Higher Open

European stocks closed sharply lower on Monday amid another jump in sovereign yields and fresh concerns that risks to AI safety could hamper investment in hardware. The Euro STOXX 50 fell 1.1% to 6,257 and the STOXX Europe 600 dropped 0.5% to 636. Anthropic CEO Dario Amodei called for a slowdown on the development of frontier AI models to prevent a scenario where the loss of control in agents could have adverse effects on society, prompting endorsements from rivals OpenAI and xAI. The possibility of added guardrails on AI development pressured stocks for chip manufacturers and other companies in the AI infrastructure sector. ASML and Infineon sank 6.3% and 7.5%, respectively, while Schneider Electric lost 6.8% and Siemens Energy plummeted 8.5%. Meanwhile, banks also closed sharply lower as more escalation in the Middle East lifted oil and gas prices and worsened the inflation outlook in the Eurozone. Santander, BBVA, Intesa Sanpaolo, and Deutsche Bank dropped between 2% and 1.3%.

Stocks in Europe kicked off the week on a negative note, with the STOXX 50 falling 0.5% and the STOXX 600 losing 0.1%, as oil resumed its climb after Saudi Arabia shut down a major oil pipeline following drone attacks, while a planned meeting between Iran and Gulf states was postponed. Global sentiment was also pressured after major AI companies OpenAI and Anthropic called for a slower pace of development amid growing concerns over safety risks. ASML Holding sank more than 4% and Infineon was down 6% to bottom the STOXX 600, alongside Siemens Energy (-4.3%) and Prysmian (-5%). On the other hand, the energy sector gained ground, led by Shell (1.1%), TotalEnergies (1%) and BP (1.2%). Novartis also rose 2.1%, attempting to rebound from losses in the previous sessions.

European equity markets were set for a weaker open on Monday as oil prices rallied again after Saudi Arabia shut down a major oil pipeline following drone attacks, while a planned meeting between Iran and Gulf states was postponed. Global sentiment was also pressured after artificial intelligence companies called for a slower pace of development amid growing concerns over safety risks. Investors were additionally preparing for the US Federal Reserve’s policy meeting this week, where the central bank is expected to raise interest rates to counter persistent inflationary pressures. The European Central Bank also delivered a rate hike last week, while the Bank of England is expected to keep policy unchanged on Thursday. No major economic data or corporate earnings reports are scheduled for release in Europe today. In premarket trading, Euro Stoxx 50 and Stoxx 600 futures fell 0.4% and 0.2%, respectively.