European Stocks Tumble as Middle East Tensions Spike Oil Prices, Trigger Safe-Haven Buying

Major European stock indexes closed sharply lower on May 28, 2026, as escalating geopolitical turmoil in the Middle East rattled markets and triggered a flight to safety. The pan-European STOXX 600 dropped 1.2% to 512.34, its steepest daily decline in three weeks. Brent crude surged 3.1% to $78.50 a barrel on supply disruption fears, boosting energy majors like Shell and TotalEnergies by over 2%, but weighing heavily on travel and industrial sectors. Airlines and automakers fell the most, with the Stoxx Travel & Leisure index sinking 2.8% on higher fuel costs and demand concerns. “The sharp escalation and the potential for a broader regional conflict are driving a classic risk-off session,” said a trader at a major Frankfurt bank. “Investors are rushing into gold and German bunds, punishing cyclical equities.” Gold futures added 1.5% to $2,150 an ounce, while the yield on the 10-year German bund fell 6 basis points to 2.32%. The DAX 40 lost 1.4% in Frankfurt, and the FTSE 100 shed 0.9% in London.