Eurozone meltdown as EU stocks plummet amid WW3 fears

European markets tumbled to three-month lows as escalating tensions rattled investors.

The selloff was sparked by ‘s unprecedented strike on a Russian military base using US-made long-range missiles, with ‘s warning of lowering the threshold for nuclear weapon use adding to market unease.

The Euro-Pan Stoxx 600 index dropped 1% early in the session, while major indices like Germany’s DAX and France’s CAC 40 fell by 0.67%.

The conflict also triggered a sharp rise in energy prices. Oil surged by 3%, while natural gas futures climbed nearly 4%, reaching their highest levels in a year.

Fears of disruptions to ’s oil and gas infrastructure are making markets nervous, with energy costs expected to remain volatile.

The banking sector was hit hardest in the recent market sell-off, as fears of an all-out war raised concerns about Europe’s public finances.

The Stoxx Euro 600 banking index dropped 1.4%, with UniCredit shares plunging 5% intraday before recovering slightly to close 2.3% lower. Other major banks, including Banco Santander and BNP Paribas, also posted losses of 1.57% and 1.84%, respectively.

While the broader stock market lost ground, European defence stocks like Rheinmetall AG and Thales rose over 3%, presenting potential opportunities for investors looking to diversify their portfolios.

Investors have also been turning to safe-haven assets, with gold futures on COMEX spiking by 0.63% on Tuesday.

Kyle Rodd, Senior analyst at commented: “Any escalation will likely boost energy prices while dragging European stocks lower.”

Similarly, Michael McCarthy, chief market strategist at Moomoo, predicted ongoing volatility in oil and gas markets, adding that energy costs are “vulnerable to spikes” in the coming weeks.