MARKET WRAPS

Stocks:

European shares were largely up Monday while the euro fell weighed by worries that French fiscal stress would spread elsewhere on the continent.

French government bond yields rose on Monday, staying at elevated levels not far below Friday's multiyear highs.

"We suspect that bond market nervousness will remain in the near term," Investec said.

Meanwhile, Spanish Prime Minister Pedro Sanchez called fresh parliamentary elections for next month after protests against high housing costs, adding to the instability rocking European politics.

Oil prices fell, but remained over $100 a barrel, as recovering Middle East crude exports and the release of oil stocks by the Group of Seven eased concerns over supplies. President Trump also ruled out a diesel export ban, which would have tightened international products markets.

The recent rise in energy prices may cool demand in the eurozone through a variety of channels that would limit the need for rate rises to contain inflation, European Central Bank Chief Economist Philip Lane said Monday.

ING said the ECB has a difficult job in terms of "talking tough to keep a lid on inflation, while at the same time being expected to step in at some point should the French debt selloff get out of hand."

Looking ahead this week, Eurozone economic data due will be watched against the backdrop of bond-market worries. Investors will also watch for the European Central Bank's accounts of its September meeting due on Thursday for clues on when rates could rise again.

U.S. Markets:

Stock futures were lower Monday as investors continued to consider heightened bond yields.

Investors will also be keeping an eye on the two service purchasing managers indexes set for release, with the S&P Global version due at 2:45 p.m. GMT and the Institute for Supply Management's at 3 p.m. GMT.

Forex:

The euro fell to a 16-month low against the dollar, weighed by France's fiscal woes. The currency's decline over the past days reflects the cyclical outperformance of the U.S. versus the rest of the world, and in particular versus the euroarea economy, said Bank J. Safra Sarasin.

The dollar rose, hovering close to a near 18-month peak reached overnight against a basket of currencies and supported by expectations for interest-rate rises and French fiscal concerns.

The greenback could extend gains against the euro if the recent widening in the OAT-Bund spread persists, OCBC said. "Wider peripheral spreads tend to tighten eurozone financial conditions and weigh on [euro] sentiment," it added.

Bonds:

French government bond yields were up, albeit below Friday's multiyear highs, due to concerns about France's fiscal situation, risks that parliament might not agree on the government's budget, and a looming election next year.

Spanish 10-year government bond yields trade steady, underperforming their German peers whose yields fell.

Treasury yields fell after U.S. nonfarm payrolls rose just 29,000 and the unemployment rate increased to 4.2% in September, according the U.S. Bureau of Labor Statistics on Friday.

Higher bond yields are hitting rate-sensitive sectors first, Saxo Markets said. Utilities and real estate sectors face higher refinancing costs and stronger competition from bonds, it added.

Energy:

Front-month Brent crude was down 0.9%, while WTI futures declined 1.5%.

Metals:

Gold prices rose after recent soft U.S. economic data sharply lowered expectations of a Federal Reserve rate hike in October, though a stronger dollar limited gains.

EMEA HEADLINES

Schneider Electric to Buy Software Maker PTC for $22.6 Billion

France's Schneider Electric agreed to buy PTC in an all-cash deal that values the U.S. industrial-software maker at $22.6 billion, moving to prepare its portfolio for industrial artificial intelligence.

Schneider said Monday that it offered $205 a share in cash for PTC, a 42% premium to its last closing price. PTC's board decided to recommend that the company's shareholders approve the deal.

Akzo Nobel to Sell Southeast Asia Decorative Paints Business for $1.35 Billion

Akzo Nobel has agreed to sell its decorative paints business in Southeast Asia to Nippon Paint at an enterprise value of $1.35 billion.

The Dutch paint company said Monday that net cash proceeds after taxes and minority partners are expected to be about $1 billion.

Air Liquide Targets Sales, Margin Growth Under 2030 Plan

Air Liquide said it is targeting sales growth and higher margins under a new strategic plan through 2030.

The industrial gasses company said Monday that it wants to grow net earnings per share by a compound annual growth rate of 10% over the period, from the 6.1 euros it reported for 2025.

Robotics Startup RobCo Hits $1 Billion Valuation

German robotics startup RobCo has sold shares in a deal that values the company at more than $1 billion-double the level hit earlier this year-highlighting investor enthusiasm for physical AI systems.

The company makes autonomous industrial robots aimed at automating repetitive manual tasks like stacking pallets and weighing raw materials. Its new flagship product is a two-armed, self-learning robot called Alfie that is designed to mimic a human working on a factory floor.

GLOBAL NEWS

French Bond Yields Stay Elevated, Treasury Yields Ease

French government bond yields rose on Monday, staying at elevated levels not far below Friday's multiyear highs, amid building concerns over the country's indebtness.

Treasury yields eased meanwhile after weaker-than-expected U.S. nonfarm payrolls data caused markets to trim expectations for another U.S. interest-rate increase in October.

Oil Prices Fall as G-7 Plans Crude, Diesel Release But Hormuz Shipping Risks Persist

Oil prices fell Monday as traders weighed a planned release of emergency oil and diesel stocks by the Group of Seven countries against renewed attacks around the Strait of Hormuz and persistent Middle East supply risks.

December Brent crude futures fell 0.7% to $101.59 a barrel, while December West Texas Intermediate futures dropped 1% to $88.54 a barrel.

ECB's Lane Sees 'Demand Destruction' Muting Energy Impact On Inflation

The recent rise in energy prices may cool demand in the eurozone through a variety of channels that would limit the need for rate rises to contain inflation, European Central Bank Chief Economist Philip Lane said Monday.

The ECB last month raised its key interest rate for the second time since the start of the war between the U.S. and Iran in late February. Investors expect to see further increases in borrowing costs following data released last week that showed eurozone inflation reached a three-year high in September.

FBI Arrests Alleged Chinese Agent Accused of Spying on Son of Taiwan Leader

The FBI arrested a California realtor on Sunday on charges of acting as an unregistered agent of China, accusing her of spying on a son of Taiwan's president under the direction of Chinese officials.

The alleged foreign agent, Wanying Zhang, a 34-year-old resident of Irvine, Calif., was arrested at Los Angeles International Airport before she could board a flight to Shanghai, U.S. authorities said.

Spain's Prime Minister Sanchez Calls Snap Elections After Housing Protests

Spanish Prime Minister Pedro Sanchez called fresh parliamentary elections for next month after protests against high housing costs, adding to the instability rocking European politics.

The socialist leader's move comes after a key piece of housing legislation offering more support to renters was rejected by lawmakers on Friday, demonstrating the fragility of the premier's mandate. Sanchez began a new term as head of the eurozone's fourth-largest economy in 2023 but lacks a parliamentary majority.

Flávio Bolsonaro Surges Past Lula, Setting Up a Bitter Brazil Election Runoff

SÃO PAULO-Flávio Bolsonaro dealt President Luiz Inácio Lula da Silva a bruising first-round defeat Sunday, finishing ahead of the leftist leader and putting Brazil's right within reach of taking back power in Latin America's largest nation.

Flávio Bolsonaro, a 45-year-old senator and the eldest son of imprisoned former President Jair Bolsonaro, received 47.3% of votes, short of the 50% needed for an outright victory, while da Silva got just 44.8% with 98% counted late Sunday. Other right-wing candidates won a combined 5%, leaving the 80-year-old incumbent fighting for his political survival ahead of the Oct. 25 runoff.

Multiple Security Failures Allowed FlyDubai Pilot Into Cockpit

DUBAI-Before Hamam al-Hammami stood behind his captain on FlyDubai Flight 1073 and raised an emergency ax to begin the assault that nearly brought down the plane, there had been ample opportunity for authorities in three countries to keep him from getting anywhere near that cockpit.

Oman had scrutinized his online habits and decided he showed too much interest in radical ideology to trust as a pilot at state carrier Oman Air, where he worked. They banned him from flying, sent him to a deradicalization program and put him in a desk job but didn't flag their concerns more broadly, people familiar with the matter said.

Write to priscila.barrera@wsj.com