Oil Price Surge Triggers European Stock Plunge and Rate Hike Fears

European stocks plummeted on Wednesday, with the STOXX Europe 600 index closing down 1.41%, its largest single-day drop since July.

The decline was triggered by Brent crude oil prices breaching $100 per barrel for the first time since July, sparking concerns about persistent inflation and market volatility.

Market expectations are now for four interest-rate hikes from both the European Central Bank (ECB) and the Bank of England (BoE), with a 60% probability of a fourth hike as well.

The yield on the two-year German government bond rose to 3.08%, its highest level since June 2024, reflecting increased bets on rate hikes.