Wall Street Slips, Nasdaq Drops 1.39% as London Prepares to Open

London markets are set to open at 09:00 Europe/Rome after a session of broad losses on Wall Street Thursday and a near-flat finish in Tokyo overnight, with the day's main macro event — the preliminary Michigan Consumer Sentiment reading for October — scheduled for 14:00 UTC.

What happened

The Nasdaq 100 led the decline in New York, closing Thursday at 30,725.81, a drop of 434.27 points or 1.39% from the previous session's 31,160.08. The move represented the sharpest single-session percentage fall among the major US benchmarks tracked. The S&P 500 closed at 7,765.36, down 36.41 points or 0.47% from its prior close of 7,801.77, extending the index's retreat from recent levels.

The divergence in magnitude between the two US indices points to pressure concentrated in the technology-heavy segment of the market. The broader large-cap universe, as measured by the S&P 500, absorbed the session more moderately, with its 0.47% decline less than a third of the Nasdaq 100's loss in percentage terms.

The gap between the two moves is consistent with a session in which large-capitalisation technology names weighed disproportionately on the Nasdaq 100's composition, while more diversified sectors within the S&P 500 provided a partial offset. The Nasdaq 100's closing level of 30,725.81 and the S&P 500's 7,765.36 are the reference points heading into Friday's New York open.

Asia overnight and currency markets

The Nikkei 225 in Tokyo ended Friday's session little changed, at 69,030.92 — a decline of just 11.19 points or 0.02% from the prior close of 69,042.11. The index tracked sideways through the Asian session, offering no clear directional signal heading into the European open. The near-flat outcome in Tokyo suggests that Asian equity markets did not amplify the Wall Street weakness from Thursday, choosing instead to hold a broadly stable footing.

The contrast between Tokyo's near-unchanged close and the Nasdaq 100's 1.39% fall in New York is notable. Japanese equities, which have been sensitive to moves in US technology shares at various points in 2026, showed little reaction on this occasion, leaving European traders to form their own assessment of Thursday's Wall Street session without a strong directional steer from Asia.

In currency markets, the euro stands at 1.1227 against the US dollar as of 07:00 UTC Friday, up 0.0011 or 0.10% from the previous close of 1.1216. The move is modest and keeps EUR/USD above the 1.12 handle as London desks come online. The dollar's limited recovery despite a negative tone in US equities on Thursday is a feature of the current setup that European market participants will be monitoring as the session develops.

The euro's slight firming adds a mild headwind for European exporters whose revenues are denominated in US dollars, though the 0.10% move is too small in isolation to be a dominant factor at the open. The EUR/USD level as of 07:00 UTC remains the key FX reference for the London morning.

Why it matters

The Nasdaq 100's 1.39% decline is a meaningful single-session move for an index that has been a central driver of global equity sentiment in 2026. European growth and technology-adjacent sectors often take their cue from such moves at the New York close. The S&P 500's more contained 0.47% loss indicates the pressure was not uniformly distributed across the US market, but the overall direction was negative for both benchmarks.

Tokyo's near-flat session — the Nikkei 225 down just 0.02% — provides limited guidance for European traders. The negligible move in Japan suggests Asian investors chose to hold positions rather than react strongly to the Wall Street weakness, a posture that may reflect caution ahead of Friday's US data release. With no strong signal from Asia, London opens largely in the shadow of Thursday's New York close.

The EUR/USD level above 1.12 reflects a dollar that has not regained significant ground despite the negative tone in US equities. For European investors with US-dollar-denominated holdings, the currency relationship remains a factor in translating any further moves in US benchmarks back into euro terms. The 0.10% gain in the euro since Thursday's close is small but directionally consistent with a softer dollar environment.

The Michigan Consumer Sentiment series carries weight as a forward-looking gauge of US household confidence. The prior October reading of 48.1 already reflected a subdued level of sentiment, and the estimate for this month's preliminary figure stands at 47.6, pointing to a further modest decline if realised.

What to watch next

The primary scheduled event for Friday is the preliminary Michigan Consumer Sentiment index for October, due at 14:00 UTC. The estimate for the reading stands at 47.6, against a prior reading of 48.1. The figure will be released after the London open but well within the European trading day, meaning any significant deviation from the 47.6 estimate could move both equities and the dollar during European hours.

The prior reading of 48.1 already reflected a subdued level of US household confidence, and the October estimate of 47.6 points to a further modest decline if confirmed. A result materially different from the 47.6 estimate in either direction would be the afternoon's main data point for markets still digesting Thursday's equity losses. The combination of a weak Wall Street close and a potentially softer sentiment reading makes the 14:00 UTC release a focal point for the full European session.

Beyond the data, market participants will be watching whether the Nasdaq 100's Thursday decline of 1.39% carries into Friday's New York session or stabilises. The S&P 500's close at 7,765.36 and the Nasdaq 100's close at 30,725.81 are the levels against which Friday's US open will be measured. The EUR/USD rate at 1.1227 as of 07:00 UTC is the FX baseline for the London morning session, and any shift in dollar direction following the Michigan release would be reflected there first.