Source: Sharecast
The pan-European Stoxx 600 index finished 0.4% lower at 633.77, with moderate losses recorded across all major indices. This was the fourth day of losses in the past five days for the Stoxx 600, pushing the benchmark to its lowest closing price since 12 June.
“Rapidly rising global yields amid surging energy prices and rate hike expectations keep stock markets under the cosh," said Axel Rudolph, chief technical analyst at IG. "Mounting inflation risks and growing fiscal concerns contribute to risk-off sentiment ahead of Wednesday's near-certain 25 basis point US Fed rate hike."
Bond yields in the US and Japan surged on Tuesday as expectations continue to rise that both countries' central banks will raise interest rates this week in response to accelerating price pressures.
The 10-year US Treasury yield topped the 5% mark for the first time since a brief moment in October 2023, a level it has not held firmly above since 2007. Japan's 10-year bond yield up 4.9 basis points at 3.042%, hitting new highs not seen since 1996,
Meanwhile, Brent crude was 2.2% higher at $108.03 a barrel by the close in Europe, its highest settlement price since 19 May, as threats to Saudi exports grew after increasing attacks by Iran-backed Houthi rebels on Red Sea facilities.
Sentiment was also still weak in the tech sector after comments from Anthropic boss Dario Amodei at the weekend, who called for the pace of AI development to slow down due to "serious" risks associated with the rapid pace of advancements.
OpenAI chief executive Sam Altman also confirmed the company would not pursue a stock‑market listing this year, calling an IPO "ill‑advised" just a month after CFO Sarah Friar suggested the group would go public by 2027 at the latest.
In economic news, German investor sentiment improved less than expected in September, according to a survey by the ZEW Center for European Economic Research. The ZEW economic expectations index ticked up to 34.7 from 34.2 in August, but this was below expectations for a reading of 40.0. The current conditions index rose to -47.1 in September from -61.1 the month before.
Meanwhile, the eurozone trade surplus rose to €14.2bn, up from €7.3bn in June and €10.7bn a year earlier, Eurostat reported. This was the highest since October 2025 and well above the €3.7bn expected by economists.
In equity news, financial stocks were among the day's worst performers across Europe, with Temenos, Plus500, CVC Capital Partners, UBS and London Stock Exchange Group all in the top ten fallers list on the Stoxx 600.
Higher oil prices were having a negative impact on consumer, luxury and discretionary stocks, with Zalando, Adidas, Hermes, LVMH and EssilorLuxottica all out of favour.