European Stocks Plummet as Brent Crude Surges Past $100

European stocks suffered their largest decline in over two weeks on Thursday as Brent crude oil prices surged past $100 per barrel and the European Central Bank hinted at a potential interest rate hike in September.

The pan-European Stoxx 600 index fell by 1.3% to close at 638.5 points, its biggest one-day drop since early July. The decline was widespread across sectors, with food and beverage stocks and technology names bearing the brunt of the rout, while energy shares bucked the trend to post gains.

The surge in oil prices was sparked by Yemen's Houthi rebels claiming responsibility for attacking two Saudi oil tankers in the Red Sea. The escalation in the Middle East compounded fears of global supply disruptions and pushed crude prices sharply higher during the session.

The European Central Bank left its key interest rates unchanged, but President Christine Lagarde's remarks were interpreted as opening the door to a rate increase at the September meeting. 'The ECB is clearly leaning hawkish,' said Claus Vistesen, chief euro zone economist at Pantheon Macroeconomics.