European stock markets opened lower on Tuesday as rising oil prices, higher government bond yields and renewed fighting in the Middle East increased concern about inflation and future interest-rate increases.
Major indices lose ground
The pan-European STOXX 600 moved lower shortly after trading began, extending Monday’s decline. Germany’s DAX fell around 0.2 per cent in early trading, while France’s CAC 40 and Britain’s FTSE 100 also opened under pressure.
London returned after the summer bank holiday, with investors reacting to developments that had already affected continental markets on Monday. Energy companies received some support from stronger crude prices, but the wider market remained cautious.
Weak German spending data
Germany added to the negative tone after official figures showed that retail sales fell 3.4 per cent in July compared with the previous month. Economists had expected an increase of 0.4 per cent.
The unexpectedly weak figures raised further questions about consumer demand in Europe’s largest economy.
Energy costs revive inflation fears
Brent crude traded above $91 per barrel after renewed exchanges between the United States and Iran raised fears of further disruption to energy supplies from the Gulf. European natural-gas prices have also reached their highest level in more than three years.
European Central Bank policymaker Olli Rehn warned that a prolonged Middle East conflict could keep inflation elevated across the eurozone. He said the central bank could not become complacent about energy-driven price pressure.
Inflation data in focus
Investors were awaiting preliminary eurozone inflation figures later on Tuesday. Stronger-than-expected price growth could reinforce expectations that the European Central Bank will raise interest rates at its September meeting.
The opening therefore reflected a difficult balance for European markets: weak consumer demand suggested slower growth, while rising energy prices increased the risk that inflation and borrowing costs would remain high.
Newshub Editorial in Europe – 1 September 2026
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