European Markets Tumble on AI Fears and Oil Price Spike

European markets opened under pressure on Monday as concerns over artificial intelligence (AI) and oil prices weighed on investor sentiment.

The AI-related sell-off saw semiconductor stocks fall, with SK Hynix and Kioxia dropping more than 6% and SoftBank down by double digits at one point. ASML fell roughly 4%, while Soitec slid 12% and Aixtron 8%. The tech-heavy STOXX 600 index was near 0.0%, but the energy sector rose 0.4%.

The oil price spike, with Brent crude up about 3.0% around $107.5-107.8 and WTI up about 2.9% around $102.9, added to the market's woes. Geopolitical tensions in the Middle East also contributed to the uncertainty.

The August core CPI data showed a 0.3% month-over-month increase, pushing September rate hike odds to roughly 87%. The 10-year Treasury yield traded at 4.96%, while the European Central Bank's policy decisions will be closely watched in light of these developments.