European stock markets reversed early gains and slipped into negative territory as rising oil prices and escalating tensions in the Middle East unsettled investors.
Markets initially opened higher following strong performances in Asia, but uncertainty surrounding the ongoing conflict between Iran, the United States, and Israel quickly dampened investor sentiment.
By early afternoon trading, Germany’s DAX index and France’s CAC 40 had both fallen by about 0.2 percent, while Britain’s FTSE 100 also declined.
Spain’s IBEX index was one of the few exceptions, posting a modest gain of around 0.3 percent.
Meanwhile, oil prices continued to climb. U.S. benchmark West Texas Intermediate crude rose roughly 3 percent to about $76.80 per barrel, while Brent crude surged above $83 per barrel.
Analysts say the rapid rise in oil prices has sparked fears that global energy costs could increase significantly.
Market experts warn that the situation is evolving quickly, making it difficult for investors to determine whether the world is heading toward a prolonged energy crisis or a short-lived market shock.
Despite the volatility, U.S. markets showed resilience earlier in the week.
The S&P 500 rose 0.8 percent, while the Dow Jones Industrial Average gained 0.5 percent. The Nasdaq Composite climbed 1.3 percent.
Strong economic data from the United States also boosted investor confidence, including reports showing faster growth in the services sector and stronger hiring by private-sector employers.
Major technology companies helped drive the rally, with Amazon rising nearly 4 percent and Nvidia gaining about 1.7 percent.
However, analysts caution that rising oil prices could complicate efforts by the U.S. Federal Reserve to control inflation while maintaining a strong labor market.
Currency markets also reflected the uncertainty, with the U.S. dollar strengthening against the Japanese yen while the euro weakened slightly.
