European equity markets were poised to open lower on Monday, extending last week’s selloff as investors monitored the escalating conflict in the Middle East and weighed the impact of higher energy prices on inflation and economic growth. The US-Israel confrontation with Iran has entered its fourth week with no sign of de-escalation. President Donald Trump has threatened strikes on Iranian power plants if the Strait of Hormuz is not reopened, while Tehran has warned it will target key US and Israeli assets across the region if its energy infrastructure comes under attack.
Soaring energy prices have intensified global inflation fears, prompting a more hawkish stance from major central banks. Last week, the European Central Bank left interest rates unchanged but signaled it is prepared to raise them in the near term if price pressures continue to mount. In premarket trading, futures on both the Euro Stoxx 50 and the Stoxx 600 were down more than 1%.
