Protests over the cost‑of‑living crisis swept across Europe, driving a selloff in regional equities and stoking political tensions as governments grappled with public anger and economic pressures.
French authorities made widespread arrests after demonstrations escalated — nearly 3,000 people were detained — even as President Emmanuel Macron rejected the resignation of the interior minister, signaling a determination to hold the government line amid mounting unrest. The unrest helped push French shares lower and was a key factor in European stocks sliding about 1.2% on the session, with France leading losses.
Meanwhile, Germany’s Bundesbank warned of upside risks to inflation, adding to concerns among investors already braced for stickier price pressures across the bloc. Those risks, together with weak consumer sentiment, are complicating policymakers’ plans as they balance support for growth with price stability.
On geopolitics, the Wall Street Journal reported Russian President Vladimir Putin has proposed a diplomatic initiative with the U.S. and China over Ukraine, a development that could reshape negotiations if it gains traction — though details and responses from western capitals remain unclear.
China’s economy showed signs of firmer momentum in the third quarter, with GDP expanding 4.5% year‑on‑year in 3Q26, up from 4.3% in 2Q26, offering a modest boost to global growth outlooks. The pickup did little, however, to offset European market weakness; across Asia markets were mostly flat, with Hong Kong an outlier, rising 0.5%.
U.S. futures pointed to a positive open, trading up between 0.5% and 1% after losses on Friday, as investors digested the mix of political, inflation and growth signals. Oil ticked lower, with Brent crude down about 1% to roughly $108 a barrel.
Meanwhile, the AI investment story showed early signs of strain as developers and investors confront heavy upfront infrastructure costs. Industry analysts warn that AI’s momentum depends on building and powering vast data‑centre capacity before projects must meet creditors’ repayment schedules. The Financial Times reports at least 47 large U.S. data‑centre projects have been delayed, withdrawn or blocked this year, underscoring financing, permitting and community‑opposition hurdles that could slow deployment of critical AI infrastructure.
Traders said the combination of social unrest in Europe, inflation upside risks, and emerging bottlenecks in AI infrastructure financing could keep volatility elevated in the coming weeks as markets reassess policy and growth trajectories.
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