European stock markets recorded their most significant drop since late March, as a fresh surge in oil prices heightened inflation concerns and exacerbated a global bond sell-off.

The Stoxx Europe 600 index fell 1.5% on Friday, with risk sentiment cooling notably following a rise in bond yields. Interest rate-sensitive sectors such as banks, utilities, and real estate broadly weakened, while a pullback in prices for metals like gold and copper weighed on mining stocks. Energy shares were among the few bright spots, while healthcare and consumer staples sectors outperformed, benefiting from investors shifting towards defensive assets.

Brent crude oil surpassed $109 per barrel after U.S. President Donald Trump stated in an interview with Fox News that the United States did not need the Strait of Hormuz to remain open.

Paul Skinner, Investment Director at Wellington Management, commented, "Against a backdrop of ongoing turbulence in bond markets, persistent inflation issues, and the lack of a summit-driven solution for the Strait of Hormuz situation, I believe the market is certainly poised for some volatility ahead."