A plume of smoke rises after a strike in Tehran, Iran, Monday, March 2, 2026.
Mohsen Ganji | AP
LONDON — European stocks opened sharply lower on Tuesday, as the intensifying conflict in the Middle East continued to weigh on global investor sentiment.
Shortly after the opening bell, the pan-European Stoxx 600 was 1.8% lower, extending Monday’s steep losses that saw the index close down 1.6%. On Tuesday morning, stocks across sectors sold off, with banking stocks, down 2.7%, insurance stocks, down 3.3%, and utilities stocks, down 2.4%, leading losses. Even the Stoxx Aerospace and Defense index, home to the region’s biggest defense primes, shed 1% after ending Monday’s session in positive territory.
All major regional bourses traded in negative territory, with Germany’s DAX and Italy’s FTSE MIB notching the sharpest declines.
Global markets continue to slide as the conflict between the U.S. and Iran engulfs the wider Gulf region. Overnight, Saudi Arabia’s defense ministry said that two drones hit the U.S. embassy in Riyadh.
A risk-off mood has taken hold of markets, with gold, considered a safe-haven during times of uncertainty, surging. Global equities continue to remain under pressure, with U.S. futures and Asian markets falling Tuesday.
Global crude oil prices also surged Monday on worries that the U.S.-Iran conflict could disrupt oil infrastructure and push up fuel prices, adding inflationary risks.
An Iranian Revolutionary Guard commander said the Strait of Hormuz — the world’s most vital transit route for crude oil — is closed and that Iran would set ablaze ships attempting the route, Reuters reported, citing Iranian media.
