Europe's stock market rally is showing no signs of winding down, and Germany's DAX is leading the celebrations this week. The benchmark index, which tracks Germany's blue-chip companies listed in Frankfurt, climbed another 1.0% at the open, pushing to fresh record highs even as Wall Street looked set for yet another troubling session, extending the momentum built earlier in the week.

Here is how European indices are faring at the open:

• Eurostoxx: +0.3%
• Germany DAX: +1.0%
• France CAC 40: +0.6%
• UK FTSE: +0.3%
• Spain IBEX: flat
• Italy FTSE MIB: -0.2%

It is not a clean sweep, but European investors certainly have more reasons to smile than their US counterparts on this occasion. S&P 500 futures, which give a read on where Wall Street is expected to open, are down 0.4%, while Nasdaq futures are falling 0.9%, as technology stocks once again look vulnerable following recent attempts to recover from last week's brutal selloff.

Nvidia, long the standard-bearer of the AI rally, is facing heavy scrutiny amid a series of affair scandals involving CEO Jensen Huang. The chipmaker's shares are down another 6.5% in pre-market trading, the period before the regular US session when shares can still move sharply on overnight news, and if that decline is sustained, the stock will fall to its lowest level since July 2025.

The fact that the DAX is cruising along and pushing to fresh record highs suggests that investors are no longer treating Europe simply as a passenger in Wall Street's rally. That said, there is still a fair bit of unevenness beneath the surface, with Spain and Italy slipping slightly. Both indices, however, have recovered well enough to erase the entirety of their respective declines in October.

Falling oil prices and geopolitical relief helped give European stocks a good nudge earlier in the week, and that mood has persisted since, alongside more resilient corporate earnings in the third quarter. Investors have embraced the combination and are not letting go as trading moves into the second half of the week.

There may also be an element of rotation at play, with US technology stocks having encountered considerable volatility over the past weeks and investors suddenly rushing across the Atlantic. That is worth considering, although European equities have their own set of challenges amid growing fiscal risks in France, higher borrowing costs, and a potential stagflation problem — a combination of stagnant growth and elevated inflation — that may be building.

Circling back to the market open, Europe is still very much moving to its own rhythm. The DAX is setting the pace, but the real test will be whether the rest of the region can keep up if Wall Street's technology troubles continue to deepen. Just as closely watched will be whether Nvidia's pre-market slide holds up once regular trading gets underway in the US, given the chipmaker's role as the standard-bearer of the AI rally.