Stock markets dropped on Tuesday. Declines in prominent German and Swiss banks have revived fears of a European banking crisis. Stocks had opened moderately higher in a small nod to establishment candidate Hilary Clinton winning the US presidential debate.

S&P 500 futures and the Mexican peso both rallied during the presidential debate. Conventional wisdom suggests US stocks and the peso would benefit more under a Hillary Clinton presidency than under Donald Trump, who has openly attacked US trade deals with Mexico. Linking the Mexican currency to the Presidential debate is a little tenuous. The gains in the peso and the S&P 500 were also in part to short-covering as they came of record low and 2-week lows respectively.

The FTSE 100 erased early gains to fall in early trading with the Basic Materials sector contributing the most to the declines.

Shares  of Wolseley fell over 3% to the bottom of the FTSE 100 after the plumbing and building supplier said it would cut 800 jobs and close 80 branches. The restructuring at its UK arm will cost Wolseley around £100m and took away from the rise in profits and dividend hike. Cutting costs in the UK while focusing growth efforts on its profit-driving US business suggests Wolseley is moving closer to being an American-only business. Building materials supplier Travis Perkins dropped in sympathy.

Shares of Thomas Cook were under pressure despite the company maintaining its full-year profit guidance. Investors fear that Thomas Cook will be unable to replace the sharp drop-off in demand for holidays to Turkey, especially when the fall in the pound makes holidays to Europe more expensive.

US stocks look set for a higher open but are well-off afterhours highs. US traders are fading the no-Trump jump in equity index futures. There is a fear that Deutsche Bank is setting up as Europe’s Lehman Brothers moment. US banks have been taking advantage of the difficulties in the European banking sector by taking market share but trouble at a multinational with a big presence in US capital markets like Deutsche Bank carries huge counterparty risk.

Nike shares will be in focus ahead of its quarterly earnings update.