European Shares Set To Open Lower As Trump's Second Term Faces Crucial Test

(RTTNews) - European stocks may open on a sluggish note on Tuesday after the S&P 500 and Nasdaq reversed early gains to end lower overnight on growing pessimism about big tech and the artificial intelligence trade.

U.S. equity futures ticked lower after Apple delivered mixed earnings results. The iPhone maker posted increased quarterly revenue and profits but forecast slightly below-consensus gross margin for the current quarter, citing mounting headwinds from rising component prices.

Meanwhile, Americans vote today in midterm elections that will decide control of the House of the Representatives and the Senate.

Polls suggest Democrats are likely to win the House of Representatives but the outcome in the Senate is unclear.

Republicans controlled both chambers of Congress during the first two years of Donald Trump's second term, which has been marked by a prolonged war in Iran, rising inflation and trade disputes.

In economic news, the release of key job openings, ISM services index, weekly jobless claims and payrolls data this week could influence the Federal Reserve's rate trajectory.

The Bank of England is expected to increase U.K. interest rates to 4 percent on Thursday after several recent pauses, given resilient growth and stubbornly high inflation.

Asian markets were mixed, with Japanese markets closed for a national public holiday.

Chinese markets were in the spotlight after China's central bank announced it would step up the use of monetary policy tools to support its capital market, strengthen market resilience and boost investor confidence.

The U.S. dollar wobbled as the Supreme Cort rejected the Trump administration's emergency request to set aside around 20000 ballots in California in the midterm election.

Gold fell 0.7 percent to $3,920 an ounce while Brent crude futures were modestly higher above $105 a barrel after slumping 7.6 percent in the previous session on signs of diplomatic progress between the U.S. and Iran.

Iranian President Masoud Pezeshkian said his government has been granted more authority by the country's supreme leader Mojtaba Khamenei to pursue peace talks.

U.S. President Trump signaled progress in negotiations while Iran said its offer to reopen the Strait of Hormuz can be implemented in two days if the U.S. agrees to terms.

Overnight, U.S. stocks gave up early gains to end mixed as lingering concerns about a potential artificial intelligence bust offset a sharp pullback in oil prices.

Crude oil prices fell more than 7 percent after President Trump said he's in no rush to restart the war with Iran and Tehran said it was open to peace talks.

Investors also reacted to Marvell Technology's announcement of a massive $115 billion acquisition of Lumentum as well as Oracle's plans to raise $20 billion through stock and bond offerings to finance its AI infrastructure expansion.

Anthropic released an amended S-1 filing that revealed $895 billion in AI commitments, $17 billion quarterly revenue and a $23.3 billion net loss.

In economic releases, a survey showed U.S. manufacturing activity picked up in October amid solid domestic demand, driving factory hiring to levels not seen in over five years and keeping inflation at the factory gate elevated.

The tech-heavy Nasdaq Composite fell 1.1 percent and the S&P 500 dropped half a percent, extending the sharp pullback seen over the last two sessions and hitting their lowest closing levels in three months. The narrower Dow rose 0.4 percent.

European stocks closed on a firm note on Monday, with travel and leisure shares posting their biggest daily gain since June, as a sharp drop in oil prices on optimism about a potential U.S.-Iran peace agreement eased concerns about fuel costs.

The pan-European STOXX 600 gained 0.4 percent. The German DAX rose 0.6 percent, France's CAC 40 rallied 1 percent and the U.K.'s FTSE 100 added 0.3 percent.