European stocks fell sharply Monday, with risk appetite hit hard globally after the U.S. and Israel launched widespread attacks on Iran over the weekend.
At 03:05 ET (08:05 GMT), the DAX index in Germany dropped 2.5%, the CAC 40 in France slipped 2.1% and the FTSE 100 in the U.K. fell 0.8%.
Subscribe to InvestingPro for more stock market analysis Conflict in the Middle East Equity markets have fallen across the board, with indices in Asia and Europe in the red and futures pointing to weakness on Wall Street later in the session, after the U.S. and Israel attacked Iran over the weekend, killing several top officials, including Supreme Leader Ayatollah Ali Khamenei.
Iran retaliated by launching strikes across several Middle Eastern countries and U.S. bases in the region.
The conflict showed few signs of ceasing, with U.S. President Donald Trump saying overnight that U.S. and Israeli military operations would continue and could last several weeks.
“We will not negotiate with the United States,” Iran’s top security official Ali Larijani said in a post on X on Monday, hardening the country’s stance after Tehran had late last week discussed the possibility of a nuclear deal with Washington.
Winning streak under threat The selloff in Europe comes after shares closed at a record high on Friday, logging their eighth straight month of gains after better-than-expected corporate updates.
The pan-European STOXX 600 registered its longest monthly winning streak since 2012-2013 on Friday.
The quarterly earnings season is gradually petering out, but there were still some results for investors to assess Monday, although the overall tone has now changed.
Smith & Nephew (LON:SN) posted a 15.5% jump in annual profit, with the British medical products maker building on the success of its turnaround plans, which delivered cost savings and boosted growth across its divisions.
Bunzl (LON:BNZL) reported a 9.8% drop in annual adjusted pretax profit, as weaker trading conditions in the U.K. business supplies distributor’s key North American division was compounded by tariff-related supply-chain disruptions.
Galp Energia (ELI:GALP) reported a strong operational performance in 2025, with the Portuguese energy company benefiting from robust cash generation and a solid balance sheet despite weaker oil prices.
German retail sales fell sharply in January Turning to the economic data slate, German retail sales fell more than expected in January, decreasing by 0.9% compared to the previous month, data showed on Monday, instead of the 0.2% fall expected.
British house prices rose 0.3% in February, leaving them 1.0% higher than a year earlier, figures from mortgage lender Nationwide Building Society showed.
The final reading of the Eurozone manufacturing PMI release for February is scheduled for release later in the session, and is expected to confirm that the sector moved into expansionary territory last month.
