European Shares Record First Monthly Decline in Six Months
European stocks fell in September as rising bond yields and hawkish central bank policies responded to energy shocks from the Iran war.
The STOXX 600 index is on track to record its first monthly decline in six months, falling 1.7% throughout September. This downturn follows a surge in global bond yields and a hawkish shift from the Federal Reserve and the European Central Bank. These policy changes respond to deteriorating government finances and an energy-price shock caused by the war in Iran.
Oil prices rose nearly 14% during the month as diplomatic talks between the United States and Iran to end the conflict stalled. The market trajectory was largely set by the hawkish tone adopted by Federal Reserve Chief Kevin Warsh during the Jackson Hole symposium.
Despite the broader decline, some sectors and companies saw gains. Utilities performed well, and the British fast-food chain Greggs saw its shares rise 6.3% after the company raised its annual profit outlook. Investors are now monitoring preliminary September inflation data from Germany to determine the broader economic outlook for the euro zone.
