Eurozone Inflation Surges to Three-Year High as ECB Rate Hikes Loom

European stocks extended their decline on August 1 as eurozone inflation accelerated to its highest level in three years, fueling concerns over additional rate hikes by the European Central Bank (ECB).

The pan-European STOXX 600 index closed nearly flat at 651.35 points, up just 0.04% from the previous session.

Major indices broadly lower across the board, with Germany's DAX falling 1.10%, France's CAC 40 slipping 0.39%, Italy's FTSE MIB declining 1.33%, Spain's IBEX 35 dropping 0.75%, and the UK's FTSE 100 losing 0.32%.

The persistent sell-off in bonds weighed heavily on equities, with crude oil prices climbing as fighting reignited in the Middle East pushing global bond yields through key technical thresholds.