The pan-European STOXX 600 index ended 0.6% lower, its biggest single-day day decline in a month
European shares dropped in broad-based declines on Tuesday in the lead-up to inflation figures around the world this week, while cautious commentary from Fed officials further dampened sentiment.
The pan-European STOXX 600 index ended 0.6% lower, its biggest single-day day decline in a month. Most local equity indexes also closed the day down, with French stocks the worst hit, down 0.9%.
Minneapolis Fed President Neel Kashkari said in an interview with CNBC that the U.S. central bank should wait for significant progress on inflation before reducing interest rates.
Travel and leisure led losses across the major STOXX 600 indexes, declining 2.8% as London-listed shares of Flutter Entertainment lost 7.4%.
Heavyweight health care stocks slipped 1%, while real estate bucked the trend to gain 0.7%.
Markets were relatively quiet because not much was going on from an economic point of view, according to Axel Rudolph, senior market analyst at IG Group. And with this long weekend, a lot of traders did not reposition their portfolios in any meaningful way.
The spotlight would be on May consumer prices data for the euro zone due on Friday, while individual inflation numbers from Germany, Spain and France will also be released throughout the week.
The ECB looks set to start easing interest rates in its upcoming meeting next week, with bets showing a more than 91% chance of a rate cut, as per LSEG data.
On the other hand, traders see a 50% probability the first rate cut from the Federal Reserve could take place in September, as per the CME FedWatch Tool.
Also on the radar would be the U.S. PCE price index on Friday for clues on whether it will be able to cut interest rates this year.
