STOXX 600 Hits One-Month Low Amid Inflation and Rate Hike Fears

The pan-European STOXX 600 index fell to a one-month low on Tuesday as investors weighed the implications of rising government bond yields and higher inflation rates. The STOXX 600 slipped 0.6% to 647.08, pressured by the prospect of interest rate hikes from major central banks.

Euro zone inflation rose above 3% in August, driven by higher energy costs, which strengthened expectations that the European Central Bank will raise interest rates next week. Traders expect a 25-basis-point rate hike, according to LSEG data.

The German share price index DAX slipped 1.1%, while France's CAC 40 fell 0.4%. Energy stocks rose 1.8% as Brent crude traded above $92 a barrel.

Novartis jumped 6.3% after announcing positive late-stage trial data for its oral multiple sclerosis drug remibrutinib, which outperformed a rival treatment. Reckitt Benckiser Group added 4.4% after a U.S. jury sided with its Mead Johnson unit in a lawsuit.