Middle East Tensions Send European Stocks Lower as Oil Prices Soar

European stock markets declined on Wednesday as Brent crude prices approached $100 per barrel, fueled by renewed tensions in the Middle East. The conflict escalated after Iranian-backed Houthi forces launched strikes on several Saudi cities, drawing a key US ally further into the war.

The potential for deeper disruptions to oil supplies has reignited inflation concerns, leading traders to expect tighter monetary policy from central banks. According to data compiled by LSEG, market participants widely anticipate an interest rate hike from the European Central Bank (ECB) on Thursday.