European equities closed higher on Wednesday, led by Germany, even as France's bond market came under renewed pressure. The DAX, CAC 40, IBEX and FTSE MIB all advanced, while the euro weakened against the dollar. France's 10-year government bond yield climbed above 5% for the first time since 2002, keeping fiscal risk at the center of attention across European markets.
Investors were also weighing geopolitical developments involving Russia and Ukraine, along with their potential effects on energy supplies, inflation and monetary policy. In the United States, technology shares helped lift the major equity indexes.
DAX gains 1.35% as FTSE 100 lags
Germany's DAX rose 342.67 points, or 1.35%, to close at 25,647.10. France's CAC 40 added 83.19 points, or 1.06%, to 7,921.69. The UK's FTSE 100 gained 19.88 points, or just 0.19%, to 10,752.87.
Spain's IBEX rose 231.10 points, or 1.21%, to 19,323.50, while Italy's FTSE MIB advanced 572.32 points, or 1.17%, to 49,643.68. The gains came as investors continued to assess how geopolitical news could affect energy prices, inflation expectations and the path of interest rates.
In the United States, the Dow Jones Industrial Average rose 136.58 points, or 0.26%, to 52,632.46. The S&P 500 gained 40.62 points, or 0.53%, to 7,753.19, while the Nasdaq 100 climbed 375.15 points, or 1.27%, to 29,865.43. Earlier figures showed the Nasdaq Composite up 296.49 points, or 1.12%, at 26,721.31.
French 10-year yield reaches 5.009%
France's 10-year government bond yield rose 6.4 basis points to 5.009%, its highest level since 2002. Germany's equivalent yield increased by only 0.4 basis points to 3.421%, widening the France-Germany spread to about 159 basis points.
The wider spread indicates that investors are demanding greater compensation to hold French debt amid concerns over the country's fiscal position and borrowing costs. French shares rose in line with the broader European market, but the bond market did not show the same improvement. The higher financing costs highlight the constraints facing efforts to contain fiscal pressure.
Elsewhere in Europe, Spain's 10-year yield rose 2.5 basis points to 4.079%, while Italy's increased 4.2 basis points to 4.589%. The UK's 10-year yield fell 4.9 basis points to 5.381%.
US Treasury yields were mixed. The two-year yield rose 0.6 basis points to 4.793%, the five-year yield was broadly unchanged at 4.934%, the 10-year yield fell 0.8 basis points to 5.109%, and the 30-year yield declined 1 basis point to 5.416%.
Euro slips as dollar moves unevenly
In foreign exchange markets, the euro fell 0.15% against the dollar to $1.1219. The Australian dollar was relatively stronger, rising 0.33% against the US dollar to $0.7025. Sterling edged higher to $1.3385.
The dollar fell to 158.11 yen and rose to 0.8252 Swiss francs. Differences in European bond yields, changes in energy prices and developments in Russia-Ukraine diplomacy may all shape short-term trading conditions for the euro and dollar.
France's rising funding costs could keep attention focused on fiscal divergence within Europe. Changes in expectations for energy supplies could also affect currency valuations through inflation and trade-balance channels.
Russia-Ukraine talks keep energy markets on alert
US officials said Russia had accepted a US proposal for trilateral talks involving Russia, the United States and Ukraine. Subsequent arrangements indicated that the Kremlin had agreed to resume technical-level negotiations on or after November 10, with Abu Dhabi mentioned as a possible venue.
The agreement to arrange a meeting does not resolve the main disputes. Security guarantees, sanctions, reconstruction and energy infrastructure remain subject to further negotiations.
Ukrainian President Volodymyr Zelenskyy met in Oslo on Tuesday with Norwegian Prime Minister Jonas Gahr Store, Finnish President Alexander Stubb and US special envoy Steve Witkoff. US President Donald Trump's son-in-law Jared Kushner joined the discussions remotely.
The talks covered security guarantees, sanctions, reconstruction, air defense and the possibility of a leaders' meeting. Zelenskyy also confirmed that US early-warning intelligence supporting Ukraine against Russian missile attacks had resumed. Ukraine proposed a reciprocal halt to attacks on energy infrastructure.
The diplomatic activity will still need to be tested through specific commitments and implementation. Clearer signs of de-escalation could reduce part of the geopolitical premium in energy prices and improve expectations for future supply. A renewed breakdown in negotiations could leave oil and gas markets, as well as related currencies, more exposed to sudden headlines.
Oil falls below $97 after intraday spike
Crude oil fell from an intraday high of $100.40 to $96.63, a move of as much as $3.77, breaking below the important $97 level within its recent trading range. The latest price was about $96.83, down $1.34, or 1.36%.
Diplomatic developments involving Russia, the United States and Ukraine, along with progress in US-Iran talks, were influencing expectations for potential supply disruptions. Whether oil can regain $97 will indicate whether the selling pressure following the break below that level is continuing.
Spot gold was approximately $4,132.50 an ounce, up $7.04, or 0.17%. Silver fell about 0.79% to $57.52. Natural gas declined 0.48% to roughly $6.572, while bitcoin rose about 1.80% to $84,441.
Risk assets were broadly firmer during the session, but rising French borrowing costs and the absence of a finalized peace agreement remain two concrete factors that could again affect European markets, energy prices and major currencies.