The Middle East conflict has caused a fall in European stock markets due to rising gas prices.
The war in the Middle East has led to a sharp drop in European stock markets due to rising energy prices, the Financial Times reports.
In Europe, the benchmark Stoxx Europe 600 index fell 2.9%, its sharpest daily drop since Trump imposed global tariffs last April, as gas prices in Europe rose another 20%.
Germany's Dax index fell 3.2%, extending a 2.4% decline on Monday.
Futures on the S&P 500 and Nasdaq 100 pointed to declines of 1.6% and 2.1%, respectively, for the main Wall Street indexes.
“This is panic selling. This is fear of stagflation. The market underestimated the scale of this war,” said Emmanuel Cau, head of European equity strategy at Barclays.
Gold prices, which rose on Monday amid investors' rush to safe havens, fell 1% on Tuesday, along with stocks and bonds. Analysts suggested traders may liquidate other positions to cover losses.
“People are reducing risk. It seems the market is psychologically shifting from a short war scenario to a long war scenario,” says Peter Schaffrick, global macro strategist at RBC Capital Markets.
