Source: Sharecast
By 0845 BST, the Stoxx 600 was down 0.6% at 537.27, trading at levels not seen since 8 May, with all major indices across the continent in the red.
The pan-European benchmark index has now fallen in in eight of the past nine sessions, dropping around 3% since 6 June.
“Markets are back under pressure as US officials continue to weigh the possibility of direct involvement in the escalating Iran-Israel conflict," said Matt Britzman, senior equity analyst at Hargreaves Lansdown.
"Any move in that direction would likely rattle investor confidence further, raising fears of a broader regional escalation and dragging in other major powers like China, where trade talks with the US are already on a knife's edge."
Central banks were back in focus in the aftermath of the Federal Reserve's latest policy decision on Wednesday evening. The Fed adopted a wait-and-see approach in regards to the impact of tariffs on inflation, with chair Jerome Powell admitting that policymakers were uncertain about what's around the corner.
Closer to home, the Swiss National Bank lowered interest rates on Thursday to zero from 0.25%, marking the sixth reduction in as many meetings as inflation continues to fall. "Inflationary pressure has decreased compared to the previous quarter. With today's easing of monetary policy, the SNB is countering the lower inflationary pressure," the SNB said.
Meanwhile, the Bank of England makes its own policy announcement at 1200 BST, though policymakers are largely expected to hold rates steady at 4.25%, with inflation still running well ahead of the 2% target.
In equity moves, banking stocks were providing a drag early on as geopolitical uncertainty clouds the economic outlook. Societe Generale, BNP Paribas, HSBC, Barclays, Commerzbank and Deutsche Bank were all in the red.