European Stocks Plummet as Bond Yields Rise Amid Hawkish Comments

European stocks kicked off September on a gloomy note as investors braced for higher interest rates. The pan-European STOXX 600 slipped 0.2% to a more than one-week low by 0815 GMT.

Britain's FTSE 100 fell 0.5% after trading resumed from Monday's bank holiday, while Germany's DAX and France's CAC 40 declined by the same margin.

The surge in energy prices, along with hawkish remarks from Federal Reserve Chair Kevin Warsh last week, prompted investors to price in interest rate hikes from major central banks. Traders expect the European Central Bank to hike rates by 25 basis points as early as next week, LSEG data showed.