European Shares Plummet to Three-Month Lows as Oil Prices Soar
European shares hit three-month lows on Tuesday as rising oil prices and bond yields dampened investors' risk appetite ahead of the US Federal Reserve's rate decision.
The pan-European Stoxx 600 fell 0.3% to 634.18 points, its lowest closing level since June 12. Banks and financial services stocks were among the biggest drags, with UBS dropping 3.4%.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said that a warning from Bank of America CEO Brian Moynihan about investment banking fees and sales and trading revenue triggered worries about bank earnings.
The European Central Bank raised rates for the second time this year last week, and investors are now focused on the Fed's decision. The US 10-year Treasury yield breached 5% on Monday, reaching its highest level in nearly two decades.