STOXX 600 Rises 0.81% on Oct 26, 2026 as Oil Eases and Ifo Improves

Key takeaways

• The STOXX Europe 600 rose 0.81% to 640.89 on Monday, October 26, 2026, recovering part of last week's loss, according to Yahoo Finance closing data.
• Germany's DAX gained 1.03% to 25,440.83 after the ifo business climate index rose to 90.2 in October from 89.9, its sixth straight increase, German media reported.
• Italy's FTSE MIB led the major indexes with a 1.35% gain to 49,215.66, while Spain's IBEX 35 lagged at +0.25% as Brazil-exposed Santander and Telefónica fell after Lula da Silva's re-election.
• France's CAC 40 rose 0.84% to 7,848.09 after Moody's kept the country's Aa3 rating with a negative outlook on Friday evening.
• The dollar firmed: EUR/USD slipped 0.31% to 1.1187 and GBP/USD fell 0.39% to 1.3351. Germany's 10-year Bund yield rose to 3.365%, while the UK 10-year gilt yield eased to 5.350% before Wednesday's Budget.

Session recap

European stocks started a busy central bank week higher, with the STOXX 600 up 0.81% on Monday. Reuters reported that falling oil prices and upbeat company updates helped sentiment after the index's steepest weekly loss since early September. For the wider picture, see Asian and global markets today and our Europe brief for October 23.

Notes: changes are calculated from Friday's closes using unrounded values (FTSE MIB previous close 48,558.86; EUR/USD 1.1221; GBP/USD 1.3404; Bund 3.343%; gilt 5.369%). Yield rows are Trading Economics late-session quotes checked against Investing.com daily data, retrieved at 16:50 UTC. The DAX traded between 25,217.15 and 25,509.80, and the IBEX 35 touched an intraday low of 18,779.80 before recovering (Yahoo Finance).

What drove it

Oil eases from near six-month highs

Oil prices retreated on hopes of de-escalation in US-Iran tensions, Reuters reported. That helped airlines and other fuel-sensitive companies: the travel and leisure sector rose 1.6% by late morning, while energy fell 1.5%. Lower energy costs matter for Europe because the region imports most of its oil (see how oil shocks hit inflation and rates).

German business morale improves

The ifo business climate index, a monthly survey of German companies, rose to 90.2 in October from 89.9, slightly above the 90.1 economists polled by Dow Jones Newswires expected, according to finanzen.net and ad-hoc-news. The expectations component rose to 91.6, while the assessment of current conditions fell to 88.8. Industry and construction improved, while services weakened. CMC Markets analyst Andreas Lipkow, writing for wallstreet-online, linked part of the DAX rally to the better-than-expected reading.

France gets relief from Moody's

Moody's affirmed France's Aa3 rating with a negative outlook late on Friday, Investing.com and Xinhua reported. Markets had partly priced in a downgrade, and the France-Germany 10-year spread had widened to as much as 178 basis points beforehand. Moody's said the rating assumes France adopts a 2027 budget that cuts the deficit. Trading Economics reported that France's 10-year yield fell below 5% on Monday. French banks rose, with BNP Paribas up 1.5%, according to Trading Economics. Background: why France's 10-year yield passed 5%.

Brazil's election hits Spanish stocks

Luiz Inácio Lula da Silva won Brazil's presidential runoff on Sunday with about 51.8% of the vote, PBS and The Hill reported, after markets had leaned toward Flávio Bolsonaro. Brazilian assets fell sharply. In Europe, Santander, which earns a large share of profit in Brazil, fell between 3% and 5% in intraday reports from Trading Economics and Investing.com quotes. Telefónica dropped more than 6%, also hit by a JPMorgan downgrade to underweight, according to Newsquawk. That kept the IBEX 35 well behind other markets. More in our report Lula wins Brazil runoff for a fourth term.

Company news

Genmab jumped more than 13% after follow-up data from a mid-stage colorectal cancer trial, and Computacenter rose 9.5% after raising its annual profit guidance, Reuters reported. Galp Energia fell 9.7% after talks with Spain's Moeve to combine refining, chemicals and fuel retail businesses collapsed. In Frankfurt, Bayer led the DAX on drug news, wallstreet-online reported.

Currencies

The dollar gained against the euro and the pound before the Federal Reserve's decision. A weaker euro can support exporters' earnings in euro terms, but the move was modest. Daniela Hathorn of Capital.com told Reuters: "This is a week to not pile into the market."

Political & policy watch

Central banks

The European Central Bank meets on Thursday. Reuters reported that a pause is widely expected after rate increases in June and September, and economists polled by Reuters expect a quarter-point hike in December. The Fed meets on October 27–28. Our ECB meeting October 2026 preview explains the options.

United Kingdom

Chancellor John Healey presents the Budget on Wednesday. Trading Economics reported that markets expect him to stick to the fiscal rules, which eased pressure on gilts. The government reportedly plans about £20.4 billion of extra funding for the National Wealth Fund and British Business Bank, with the added borrowing starting in 2028–29.

France and Brazil

Moody's warned that conditions in France had worsened compared with a few months ago, and government debt is about 120% of GDP, Investing.com reported. In Brazil, Flávio Bolsonaro rejected the result and said he would seek to have it annulled, according to The Hill. Brazil's electoral court declared Lula the winner on Sunday night.

What to watch next

• October 27–28: US Federal Reserve policy meeting, decision on October 28.
• October 28: UK Budget.
• October 29: ECB rate decision.
• October 30: euro area flash GDP for the third quarter (Eurostat) and the Bank of Japan decision.
• This week: results from Volkswagen, Deutsche Bank and BASF (wallstreet-online), plus euro area inflation data (Trading Economics).
• November 5: Bank of England decision.

Risk checklist for readers

• Central bank week. Fed, ECB and Bank of Japan decisions and a UK Budget in four days can move rates, currencies and bank shares sharply.
• Read the ifo index correctly. A higher headline can hide a weaker current-conditions reading; Monday's rise came from expectations, not today's business.
• Ratings and outlooks differ. Moody's kept France's rating but left the outlook negative, which means a later downgrade is still possible.
• Foreign exposure matters. European companies with large Latin American, US or Asian businesses can move on events outside Europe, as Spanish banks did on Monday.
• Currency effects. For non-euro investors, a falling euro can reduce returns from European shares even when indexes rise.
• Check official data. Closing values differ slightly between providers. STOXX, the exchanges and the ECB publish reference values.

This article is for information only and is not investment advice.