The UK market is in the red in afternoon trading Tuesday, after Moody's lowered the European Union's long-term issuer rating outlook and Spain's Andalusia joined the 'bailout club.' The U.S. index futures indicate a higher open for the markets after the Labour Day holiday.
Moody's Investors Service has downgraded the credit outlook on the European Union's AAA rating to 'negative' from 'stable,' reflecting the negative outlooks on EU's triple-A rated budget contributors.
The rating agency said that the move reflected the negative outlooks now assigned to the Aaa sovereign ratings of key contributors to the EU budget, including Germany, France, the UK and the Netherlands. These countries together account for around 45 percent of the EU's budget revenue.
According to reports, during the closed-door meeting of the lawmakers, European Central Bank President Mario Draghi defended a number of measures introduced by the ECB, including the controversial bond-purchase plan, and indicated that the central bank is not averse to buying government bonds of up to 3-year maturities on the secondary market.
Andalusia joined Spain's 'bailout club' by seeking 1 billion euros in emergency lifeline from the government on Monday. Andalusia is the fourth Spanish region to ask for immediate funding from the central government.
Meanwhile, unemployment in Spain increased in August after four consecutive declines in the past months, data released by the Ministry of Employment and Social Security showed. The number of registered unemployed rose by 38,179 between July and August, representing a rate of growth of 0.83 percent, following a decline of 0.6 percent in July.
The U.K. construction sector shrank unexpectedly in August, data released by Markit Economics showed. The Markit/Chartered Institute of Purchasing & Supply Construction Purchasing Managers' Index dropped to 49 from 50.9 in July.
The Euro Stoxx 50 index of eurozone bluechip stocks is falling 0.21 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is losing 0.82 percent.
The FTSE 100 index is declining 1.09 percent.
Miners are trading lower. BHP Billiton is losing 1.5 percent and Rio Tinto is declining 2.2 percent.
Barclays is losing 0.6 percent. JPMorgan reduced its rating on the stock. Royal Bank of Scotland is dropping around 2 percent.
Vodafone is declining 2.3 percent. Bernstein cut the stock to "Marketperform" from "Outperform."
Petrofac is gaining 1.3 percent.
The German DAX is losing 0.57 percent and the French CAC 40 is falling 0.66 percent. Switzerland's SMI is dropping 0.99 percent.
Across Asia/Pacific, major markets ended lower. Australia's All Ordinaries fell 0.60 percent, China's Shanghai Composite Index dropped 0.75 percent and Hong Kong's Hang Seng retreated 0.66 percent. Japan's Nikkei 225 slid 0.1 percent.
In the commodity space, crude for October delivery is advancing $0.70 to $97.18 per barrel and December gold is rising $7.4 to $1695.0 a troy ounce.
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Market Analysis
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.