European shares fell to a two-week low on Wednesday following hawkish comments from the Federal Reserve and escalating geopolitical tensions.
The pan-European STOXX 600 index dropped 1.5%, marking its lowest level in two weeks. The index was weighed down by concerns over the Fed's plans to tighten monetary policy sooner than expected.
Investors were spooked by the Fed's indication that interest rate hikes could come sooner than anticipated, in response to rising inflation. This news sent shockwaves through global markets, with European stocks bearing the brunt of the impact.
Geopolitical worries also contributed to the decline in European shares, as tensions between Russia and Ukraine escalated. The uncertainty surrounding the situation added to the overall market unease.
Among the worst-hit sectors were technology and mining stocks, which saw significant losses. Tech companies were particularly vulnerable to the prospect of higher borrowing costs, while mining firms were impacted by falling commodity prices.
Major European bourses, including the FTSE 100, DAX, and CAC 40, all posted losses of over 1% as investors fled riskier assets in favor of safe-haven investments.
The decline in European stocks mirrored a broader sell-off in global equities, with Asian and U.S. markets also experiencing significant losses.
Analysts warned that the volatility in markets is likely to persist as investors grapple with the implications of the Fed's hawkish stance and ongoing geopolitical tensions.
Market participants will be closely monitoring upcoming economic data releases and central bank meetings for further clues on the direction of monetary policy and its impact on global markets.
