In Paris, the CAC 40 index fell by more than 0.6% to 7,993.5 points by the end of trading, while Frankfurt's DAX dropped 1.1% to 23,547.5 points. London's FTSE 100 lost 1.2% to 10,284.7 points.

The eurozone's Euro STOXX 50 index declined by 1.3%, and the STOXX 600 fell by just over 1%.

The session was a rollercoaster, mirroring the week's trend following the launch of Operation "Epic Fury," a joint U.S.-Israeli offensive against Iran. Now in its seventh day, the operation appears to dispel hopes for the brief, targeted intervention previously anticipated by investors.

Over the week, the CAC lost just over 6.8%, its worst weekly performance since early April 2025 and Donald Trump's "Liberation Day."

This marks its first weekly decline since late January.

Since its all-time high of 8,642.2 points reached on February 26, the Paris index has shed 7.5%, bringing it close to the 10% threshold technically defined as a correction.

U.S. equity markets, which had previously shown resilience amid recent market turbulence, will not emerge from this grueling week unscathed either.

At the European close, the Dow Jones was down 1.3%, the S&P 500 fell 1.1%, and the Nasdaq slipped just under 0.9%.

Additional pressure on equities came today from disappointing February employment figures. The loss of 92,000 non-farm jobs reignited concerns regarding the health of the U.S. economy.

The movement of the VIX index—known as the "fear gauge"—which rose 10.8% to 26.3 points, indicates that investors remain nervous and that volatility is likely to remain high for days, if not weeks.

Rising oil prices: A major cause for concern

Equity markets had previously shown little reaction to surging oil prices, but the sentiment appears to have shifted in recent days.

At over 91.1 dollars per barrel, North Sea Brent is trading at its highest levels since October 2023, the onset of the Israel-Hamas conflict following the attacks on the Hebrew State.

Oil prices are also weighing on the minds of Wall Street investors, where West Texas Intermediate (WTI) crude surged 11.6% to 88.6 dollars, bringing its year-to-date increase to over 55%.

Once ignored, the spike in crude prices is now a stark reality, capturing market attention due to its implications for inflation and, consequently, monetary policy in both Europe and the United States.

Should this upward trend persist, the current monetary policy landscape—characterized by the Federal Reserve's gradual reduction of its easing strategy and the European Central Bank's cautious reinforcement of its stimulus measures—could be altered.

"Looking at history, only sharp and sustained spikes in crude prices trigger real inflationary cycles," Bank of America strategists noted.

"As long as the status quo remains—with a barrel at roughly 15 dollars above pre-war levels—fears of oil-driven inflation can be dismissed. However, if an escalation keeps prices durably above 100 dollars, the tone would clearly change," BofA warned.

As a result, the yield on the German 10-year Bund, the eurozone benchmark, rose by more than two basis points to 2.86%, while its U.S. equivalent edged down slightly to around 4.12%.

The storm across financial hubs has prompted investors to flee equity and bond markets in search of safety, notably in the foreign exchange market.

The dollar continued its ascent against the euro, which sank below the 1.16 mark, its lowest level since late November 2025.