European Stocks Plunge as Oil Prices and Rate Worries Mount

European stocks hit their lowest level in three months on September 15, as investors grew cautious about inflation and interest rates. The pan-European STOXX 600 index fell by 0.3% to 634.18 points, its lowest closing since June 12.

Banks and financial services were among the biggest losers, with UBS plummeting by 3.4%. This decline was triggered by a warning from Bank of America CEO Brian Moynihan that the US lender's investment banking fees could drop by at least 10% in the third quarter.

The energy sector bucked the trend, rising by 1.3% as oil prices surged over 2% on the day. This increase was due to heightened supply concerns following attacks on energy infrastructure in the Gulf and the Russia-Ukraine war zone.

Investors are now bracing themselves for the US Federal Reserve's rate decision on Wednesday, with more than a 90% chance of a rate hike priced in by traders.