The ECB lifted rates by 25 basis points to 2.5%, signaling a hawkish stance as energy-driven inflation forces policymakers to prioritize price stability over economic growth.
Rising energy prices due to Middle East disruptions fuel inflation, benefiting oil.
Germany's 10-year Bund yield reached multi-year high as investors price in persistent high rates.
ECB rate hike and hawkish outlook push Stoxx 600 lower.
Euro slipped as traders increased bets on ECB tightening beyond September.
The European Central Bank raised its deposit rate to 2.5% as rising energy costs from Middle East disruptions threaten to keep inflation above target. Despite resilient economic growth, markets are pricing in further tightening, pushing German 10-year Bund yields to multi-year highs and weighing on the Stoxx 600 index.
The ECB is raising rates to combat persistent inflation driven by rising energy costs, aiming to prevent temporary price shocks from becoming embedded in wages and services.