European stocks decline due to tightening comments and geopolitical concerns

European stocks fell to their lowest levels in more than two weeks on Friday, tracking global stocks, after statements from some Federal Reserve officials (the US central bank) about monetary tightening and with escalating tension in the Middle East.

According to Reuters, the European Stoxx 600 index fell 1% by 0713 GMT, heading for its first weekly decline since mid-January. Raising caution about market expectations of an imminent cut in interest rates, Minneapolis Federal Reserve Bank President Neel Kashkari said that if inflation continues to rise, there may be no need to cut interest rates by the end of the year.

Optimism about lowering interest rates has been the main driver of gains for most developed country market stocks since late 2023.

Travel and entertainment stocks led declines across sectors, affected by a jump in Brent crude prices due to the risks of supply disruptions following the escalation of geopolitical tensions in the Middle East.