European Stocks Slip as Bond Yields Reach New Highs

European stocks kicked off September on a gloomy note as bond yields rose, putting pressure on investors to price in higher interest rates. The pan-European STOXX 600 slipped 0.2% to its lowest level in over a week by 0815 GMT.

The UK's FTSE 100 fell 0.5% after trading resumed following the bank holiday, while Germany's DAX and France's CAC 40 declined 0.5% and rose 0.2%, respectively.

Bond yields reached new highs as renewed fighting in the Middle East lifted oil prices, stoking concerns about inflationary pressures. Germany's 30-year government bond yield hit a 15-year high, while France's 30-year yield touched its highest since 2008.