European stocks declined on Monday, weighed down by rising oil prices and a sell-off in artificial intelligence-related shares after leading AI company executives called for a slowdown in the development of the most advanced models. The Stoxx Europe 600 closed 0.5% lower in London, with the technology sector suffering the sharpest losses as both ASML and Infineon each fell more than 6%.

The blue-chip Euro Stoxx 50 index underperformed the broader market, dropping 1%. Defensive sectors fared better, with healthcare and personal care stocks leading the gains. Mining shares also struggled as copper prices continued their retreat from record highs. Meanwhile, US 10-year Treasury yields briefly climbed above 5%, which pushed cyclical construction stocks into the list of worst-performing sectors as well.

The pan-European benchmark index has pulled back from its post-earnings highs as growth concerns deepen and rising energy prices lift bond yields. Brent crude rose above $107 per barrel on Monday after a key Saudi Arabian oil pipeline was shut down following a drone attack. Investors are also bracing for a pivotal week of monetary policy, with the Federal Reserve, the Bank of England, and the Bank of Japan all set to announce their rate decisions. Money markets are now fully pricing in four 25-basis-point rate hikes in the eurozone over the next 12 months, while also fully pricing in five hikes from the Bank of England.