European equities opened on firmer footing as bond-market nerves cooled, but travel and leisure lagged after Jet2 warned profits would land at the lower end of guidance and cut winter seat capacity. The STOXX 600 ticked higher in early trading, aided by easing long-end yields and growing conviction that the Federal Reserve will deliver a September rate cut—a mix that tends to underpin non-U.S. assets via softer dollar dynamics and easier global financial conditions.
Airlines were the session’s pressure point. Jet2’s shares plunged on the guidance reset, with EasyJet and TUI slipping in sympathy as investors questioned fare power and late-booking visibility into the shoulder season. The sector’s weakness fits a broader theme of value-seeking consumers and tighter household budgets across Europe, where promotions are doing more of the heavy lifting and pricing latitude is narrowing. Expect analysts to revisit unit-revenue and cost per available seat assumptions if winter demand proves as back-loaded as managements now imply.
Stock-specifics outside travel also stirred the pot. Sanofi slid after amlitelimab trial data disappointed, denting healthcare’s defensive aura and reminding the market that pipeline risk still drives premium valuations in big pharma. Porsche eased on index-relegation headlines and China softness, while Volvo Cars fell after reporting lower August sales. These micro stories capped what might otherwise have been a broader relief rally on rates.
Rates were the day’s swing factor. German and French long-dated yields edged down from multi-year highs, and a smooth 30-year JGB auction overnight helped to calm global duration markets. With traders nearly fully pricing a Fed cut, equity investors are recalibrating exposure toward quality cyclicals and cash-generative growth that benefit from a gentler rates backdrop without needing a full-blown reacceleration in demand.
In commodities, Brent slipped as OPEC+ officials floated the prospect of higher output targets at the weekend meeting, easing one source of inflation tension for European consumers. Gold eased from record levels as haven demand cooled alongside lower volatility, providing an incremental tailwind to the risk tone.
What to watch next
Airline guidance on winter bookings and ancillary revenue; updates on capacity discipline and fuel hedging.
Healthcare catalysts, as pipeline readouts continue to inject factor volatility.
Rates & FX: if long yields keep drifting down and the euro stabilizes, the STOXX 600 could grind higher even with idiosyncratic stock shocks.
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