European markets opened lower Monday as investor caution grew over surging oil prices and intensifying geopolitical risks in the Middle East.
Germany’s DAX fell 0.5%, the UK’s FTSE 100 dropped 0.3%, and France’s CAC 40 also moved into negative territory. Futures pointed to continued weakness across the region.
Asian markets had already reacted negatively overnight. Japan’s Nikkei 225 plunged 4.5%, Australia’s S&P/ASX 200 fell 1.2%, and South Korea’s Kospi lost 3.2%. Hong Kong’s Hang Seng declined 1.7%.
Investors are concerned about potential disruption to oil supply through the Strait of Hormuz. Global benchmark Brent crude surged above $116 per barrel-up more than 50% since late February when conflict escalated between the U.S. and Iran. U.S. West Texas Intermediate (WTI) crude traded near $101 a barrel.
U.S. President Donald Trump signaled possible military action against Iran’s Kharg Island, a key oil terminal, during an interview with the Financial Times. He said American forces could seize the island but offered few details on how long they might remain stationed there.
Meanwhile, Wall Street wrapped its worst week in years. The S&P 500 shed 2.1%, the Nasdaq 100 slid 3.2%, and the Dow Jones dropped 0.9%. Both the Nasdaq and Dow have now entered correction territory, down more than 10% from recent highs.