Most European stock markets fall; soaring oil prices intensify inflation concerns

European stock markets opened mostly lower this week as another surge in oil prices intensified inflation concerns and continued to undermine global risk sentiment. The Euro Stoxx 50 Index fell 0.6%, Germany's DAX Index dropped 0.3%, France's CAC 40 Index decreased 0.4%, the UK's FTSE 100 Index rose 0.3%, Spain's IBEX Index dropped 0.3%, and Italy's FTSE MIB Index fell 0.5%. The main market narrative continues to focus on rising oil prices and increasing bond yields. Previously, Saudi Arabian energy infrastructure came under attack again, further threatening Middle Eastern shipping routes. This has heightened concerns that an energy shock will keep inflationary pressures elevated for a longer period. This signal is especially amplified ahead of this week's Federal Reserve meeting decision. After hotter-than-expected US inflation data and the latest jump in energy prices, markets are now pricing in an approximately 87% probability of a Federal Reserve rate hike.