European stocks decline due to statements about monetary tightening and geopolitical concerns

European stocks experienced a significant downturn on Friday, plunging to their lowest levels in over two weeks, mirroring the global stock market trend. The decline was spurred by statements from certain Federal Reserve officials signaling potential monetary tightening, coupled with escalating tensions in the Middle East.

The European STOXX 600 index plummeted by 1 percent as of 0713 GMT, setting course for its first weekly decline of over 1 percent since mid-January.

Minneapolis Federal Reserve Bank President Neel Kashkari’s remarks cautioning against market expectations of an imminent interest rate cut contributed to the downturn. Kashkari suggested that if inflation continues to surge, there might not be a need to lower interest rates by the end of the year. The anticipation of interest rate cuts has been a primary driver of gains in most developed country stock markets since late 2023.

Travel and entertainment stocks bore the brunt of the declines across sectors, influenced by a surge in Brent crude prices due to concerns over supply disruptions following heightened geopolitical tensions in the Middle East.

Shares of Swiss company Software One tumbled by 2.3 percent after announcing that all advisors opposed changing its entire board of directors.

Later in the day, investors will shift their focus to an important US jobs report for March, which is expected to provide further insights into the state of the economy.