European stocks are set to open sharply lower, signaling a renewed escalation in global market anxiety as investors retreat from risk following extreme moves across commodities, digital assets, and technology-linked themes. Futures point to broad-based declines across the region, with the FTSE 100, DAX, CAC 40, and FTSE MIB all expected to fall between 0.5% and 1%. The move reflects a synchronized global selloff rather than Europe-specific weakness, underscoring how quickly confidence has shifted after a volatile end to last week.

Global Risk-Off Mood Spreads to Europe

The negative tone in Europe follows a turbulent session across Asia-Pacific markets, where equities declined overnight, led by sharp losses in South Korea. Investors there reacted to the violent reversal in precious metals, particularly silver and gold, which suffered historic one-day drops on Friday. These moves rattled confidence in what had become crowded “hard asset” trades, prompting a broader reassessment of risk exposure.

U.S. equity futures also moved lower, extending the defensive mood into the new trading week. Market participants are increasingly wary that recent volatility is not isolated, but instead a sign of tightening financial conditions driven by shifting monetary expectations, geopolitical uncertainty, and positioning excesses across multiple asset classes.

Precious Metals and Crypto Signal Deleveraging

The sharp collapse in silver and gold has become a focal point for global markets. Silver’s roughly 30% plunge on Friday marked its worst single-day performance in more than four decades, while gold’s near-10% drop signaled aggressive profit-taking after an extended rally. Such moves often act as a stress test for broader markets, as they suggest forced deleveraging and a rapid unwinding of speculative positions.

Cryptocurrencies added to the warning signs over the weekend. Bitcoin fell below the $80,000 level for the first time in months, reinforcing the perception that investors are stepping back from higher-risk assets. Together, the declines in metals and crypto point to a shift in psychology, from chasing momentum to preserving capital.

AI Optimism Faces Fresh Scrutiny

Technology sentiment has also come under pressure, with renewed questions around the sustainability of the artificial intelligence investment boom. Attention has turned to Nvidia after reports suggested uncertainty surrounding its plans for a massive investment tied to OpenAI. While AI remains a long-term structural theme, markets are increasingly sensitive to signs that capital spending expectations may have run ahead of near-term fundamentals.

For European equities, this matters because AI-driven optimism has been a key support for global risk assets. Any recalibration of expectations around spending, returns, or execution could ripple through sectors linked to technology, industrial automation, and capital goods.

European Data and Earnings in Focus

Against this fragile backdrop, investors will monitor corporate updates and economic data for signs of resilience. Earnings from Julius Baer Group will offer insight into wealth management trends amid volatile markets, while German retail sales and Spanish new car sales data will provide a snapshot of consumer demand across key economies.

What Comes Next

European markets appear vulnerable to further downside if global volatility remains elevated. Much will depend on whether precious metals and crypto find a stable base, and whether fears around AI investment prove temporary or structural. For now, risk sentiment is firmly defensive, and investors are likely to prioritize liquidity, balance-sheet strength, and downside protection as markets navigate another potentially unstable phase.