^{Photo: The Guardian}

European markets appeared set for a subdued start on Friday as investors digested reports of a ceasefire deal in Gaza backed by U.S. President Donald Trump, alongside fresh political and economic developments across the region.

Futures for London’s FTSE 100 were down by 0.2%, while the French CAC 40 ticked up 0.1%, and Germany’s DAX futures hovered near the flat line. Swiss SMI and Italy’s FTSE MIB futures were also largely unchanged, signaling a cautious tone at the opening bell.

Thursday’s trading session ended on a weak note across most major European indices, with the pan-European Stoxx 600 closing down 0.4%, pressured by lingering political instability in France and muted risk appetite ahead of key data releases.

Middle East Ceasefire: Cautious Optimism Takes Hold

Tensions in the Middle East appeared to ease slightly after Israel approved the first phase of a U.S.-brokered peace agreement late Thursday. The deal, spearheaded by President Trump, includes the release of hostages held by Hamas and outlines a multi-stage roadmap toward a full ceasefire.

According to NBC News, the truce is expected to take effect within 24 hours, although uncertainty remains over whether Hamas will disarm and dissolve, as required under the proposed terms. Oil prices, which initially spiked earlier in the week, steadied around $84 per barrel for Brent crude, as markets assessed the potential for reduced regional tensions.

Market analysts note that a sustained ceasefire could temper recent volatility in energy markets and ease inflationary pressures in Europe, where energy costs rose 7.2% year-on-year in September.

European Political and Economic Developments

In Brussels, European Commission President Ursula von der Leyen survived two separate no-confidence votes on Thursday—securing stronger backing from lawmakers than in a similar challenge in July. Her survival bolstered political stability within the bloc at a time when European unity remains crucial for managing both security and economic challenges.

Investors are also closely watching a series of fresh economic reports due Friday. These include Italy’s industrial production data, expected to show a 0.3% month-on-month decline, Russia’s inflation rate, forecast at 6.8%, and Swiss consumer confidence, which analysts anticipate may weaken following months of rising import costs.

Switzerland continues to feel the impact of a 39% tariff imposed by the Trump administration in August—an action that the Swiss National Bank called a “significant headwind” for exporters during its September policy meeting.

Global Market Overview

Across Asia, semiconductor and AI-related stocks rebounded sharply overnight, led by gains in Taiwan’s TSMC and South Korea’s Samsung Electronics, after a flurry of AI partnership announcements from U.S. tech giants. The MSCI Asia-Pacific Index rose 0.7%, reversing part of its weekly losses.

Meanwhile, on Wall Street, U.S. stock futures were broadly steady early Friday. The S&P 500 and Nasdaq Composite both remain near record highs after a week marked by upbeat tech earnings and cooling U.S. inflation data.

Analysts at Goldman Sachs noted that global equity sentiment remains “fragile but resilient,” with investors balancing hopes of easing geopolitical tensions against concerns over slowing global growth and interest rate uncertainty.

Outlook

Friday’s European trading session is expected to be driven by geopolitical headlines and regional economic data. While optimism surrounding the Trump-backed ceasefire deal may lend temporary support to risk assets, analysts caution that sustained market momentum will depend on tangible progress toward peace and clarity on future U.S.–Europe trade relations.

As European markets navigate this mix of geopolitical relief and economic caution, investors are likely to remain defensive—favoring stable dividend stocks, energy majors, and sectors tied to industrial resilience over high-volatility growth names.