European shares fell on Tuesday as rising oil prices triggered a fresh spike in market borrowing rates, as investors increasingly priced in a raft of central bank rate hikes to stem inflation.

The average 10-year bond yield for the Group of Seven (G7) largest economies in the world hit 4.285 per cent, the highest since mid-2008 and a full percentage point above where it was prior to the start ​of the Iran war in late February. The price of brent crude oil rose more than 2 per cent to exceed $108 (€93.60) a barrel.

Three major central bank decisions – starting with the US Federal Reserve on Wednesday and followed on successive days by peers in the UK and Japan – may recast the monetary policy landscape for the rest of 2026.

The pan-European Stoxx 600 index dipped 0.3 per cent to 634.18.

Dublin

The Iseq All-Share index ended the session down 0.7 per cent at 14,126.68. Banking stocks were out of sorts as sector followers fretted about the economic impact of inflation, rather than the potential benefit lenders may get from rising interest rates as central banks seek to rein in consumer prices. AIB slid 2.2 per cent to €11.33, while Bank of Ireland lost 1.2 per cent to €19.86.

The prospect of a slew of rate hikes weighed on property-related companies. Cairn Homes dipped 0.6 per cent to €2.70, while Glenveagh Properties fell 0.7 per cent to €2.28.

Ryanair lost 1.1 per cent to €22 as amid rising fuel costs hit.

London

The FTSE 100 closed 0.4 per cent lower at 10,658.13. Aerospace and defence systems groups Babcock International and BAE Systems both rose 3.4 per cent as the Middle East war rumbles on. Oil major Shell advanced 2 per cent.

Software stocks, a strong feature on Monday, gave back some ground with Relx down 2.6 per cent, Experian off 2 per cent and London Stock Exchange falling 3.2 per cent.

Trustpilot slid 19 per cent. The Denmark-based, but London listed consumer review platform delivered mostly in-line results but shares fell as a couple of accounting discrepancies took some of the gloss off what it called a “strong” first half.

Wickes Group gained 8.3 per cent after the home improvement retailer reported strong third-quarter trading, driven by mid-single-digit growth in retail ​like-for-like revenue.

Europe

Banks and financial services stocks were among the biggest drags, falling 0.9 per cent and 1.9 per cent, respectively. UBS dropped 3.4 per cent a day ​after Bank of America chief executive Brian Moynihan warned that the US lender’s investment banking fees could drop by at least 10 per cent in the third quarter.

Cosmetics group L’Oreal overtook Louis Vuitton owner LVMH to become France’s most valuable listed company, as luxury groups ‌remain under pressure from slowing sales and weak earnings. It ​is the first time since 2017 that a non-luxury company has held the top spot on the Paris ⁠market at the close.

LVMH shares fell 2.6 per cent, while ⁠the broader European luxury gauge ​slid 1.5 per cent.

Puig ​shed 2.2 per cent after the Spanish beauty group said on Monday it would take full control of ISDIN in a €1.20 billion.

New York

Wall Street’s main stock ‌indexes were in negative territory in early afternoon trading, dragged down by higher crude prices, elevated Treasury yields and an uncertain outlook for AI demand that kept investors at bay.

Chipmakers rose after a ​sell-off on Monday, with Nvidia advancing marginally. But sentiment toward other Big Tech stocks was mixed, as Alphabet, Amazon and Microsoft fell.

The latest bout of anxiety was driven by calls from top AI companies to slow the development of the technology, citing safety concerns.

Meanwhile, the Fed is ​expected to raise interest rates, with traders pricing in a nearly 93 per cent chance of a hike on Wednesday.

Shares of restaurant and video arcade chain Dave & Buster’s tumbled after second-quarter revenue missed expectations.

Waystar rose after Reuters reported the healthcare software firm was exploring options, including a potential sale. – Additional reporting, Reuters, Bloomberg