European Stocks Tumble as Inflation and Rate Outlook Darkens

European stocks posted their biggest two-day drop since April as conflict in the Middle East intensified, casting doubt over the inflation and monetary policy outlook.

The Stoxx Europe 600 Index fell 3.1% at the close, after sinking 1.6% on Monday. The retreat was broad, with all industries posting declines. The blue-chip Euro Stoxx 50 index was down 3.6%, while the German DAX dropped 3.4%.