European blue-chip stocks tumbled as Middle East tensions sent oil prices soaring above $100 a barrel, pushing major indices toward a technical correction. The Stoxx 600 index dropped sharply, with energy and travel sectors hit hardest by the dual impact of rising crude costs and geopolitical uncertainty.

Oil's surge past $100 a barrel reignited inflation fears that had been easing in recent months. Investors worry that sustained high energy prices could force central banks to maintain restrictive monetary policies longer than expected, potentially slowing economic growth. The selloff spread across sectors, with luxury goods makers and automakers particularly vulnerable to reduced consumer spending.

The market volatility reflects growing concerns about a feedback loop: higher oil prices driving inflation, which keeps interest rates elevated, which then dampens economic activity. European companies face a challenging environment where energy costs cut into margins while consumers feel the pinch of persistent price pressures.