European stocks closed down 1.61% as concerns over ECB and BoE rate hikes intensify.

U.S. President Trump threatened to attack Iran on Wednesday evening and reimpose a maritime blockade, breaking the U.S.-Iran peace agreement. The Dow Jones Industrial Average once plunged over 850 points, while New York crude oil futures briefly surged 8%, hitting as high as $76.08 per barrel. European stock markets showed a low-level fluctuation pattern, with the pan-European Stoxx 600 index closing down 1.61% at 635 points, falling up to 1.92% during the session, marking its third consecutive day of decline.

Traders tend to expect that both the European Central Bank and the Bank of England will raise interest rates twice by the end of the year, each by 0.25 percentage points. This news dampened investment sentiment in European stocks.

Trump also said during the NATO summit in Turkey that Spain is a bad partner and ordered the U.S. to cut off all trade with Spain, sending Spanish stocks plunging. The IBEX 35 index closed at 19,104 points, plummeting 2.73% or 535 points.

The UK's FTSE 100 closed at 10,489 points, down 1.66% or 176 points; Germany's DAX closed at 24,897 points, down 2.23% or 567 points; France's CAC 40 closed at 8,252 points, plunging 2.18% or 183 points; Italy's FTSE MIB closed at 51,817 points, falling 1.22% or 638 points.

European auto giant Stellantis hit a 52-week low, with its shares in France sliding 5.9%.