Global Markets Tumble as U.S.-Israel Strikes on Iran Trigger European Stock Slump

European stock markets are bracing for a sharp downturn at the start of the trading week following major military strikes by the United States and Israel on Iran — a dramatic escalation that has rattled investors and sent shockwaves across global financial markets.

Market indicators suggest a gloomy open across the region. The U.K.’s FTSE 100 is projected to fall by 0.6%, while Germany’s DAX could drop by 1.5%. France’s CAC 40 is expected to slide 1.4%, with Italy’s FTSE MIB also likely to decline by 1.2%, reflecting growing investor anxiety amid rising geopolitical instability.

The attacks reportedly resulted in the death of Iran’s Supreme Leader, Ayatollah Ali Khamenei, marking a major turning point in Middle East tensions. In response, Iran has launched retaliatory strikes on U.S. military bases in the region, with reports confirming casualties among American service members. The situation has heightened fears of a broader regional conflict.

Global markets reacted swiftly. Oil prices surged more than 8% as traders worried about potential disruptions to supply from the Middle East — a critical energy hub. Meanwhile, U.S. stock futures fell, Asian markets declined, and airline stocks took a hit as airspace closures and flight cancellations spread across the region.

The military operation followed stalled diplomatic efforts after Iran refused U.S. demands to scale back its nuclear programme. As investors closely monitor unfolding developments, attention in Europe will also turn to upcoming corporate earnings and key economic data releases, including German retail sales and Italy’s GDP figures, which could further shape market sentiment in an already fragile environment.

source: cnbc