European Markets Rattle as Macron Calls Snap Elections

European stocks fell on Monday after French President Emmanuel Macron called a snap election following a significant loss in the EU vote to the far-right. This move unsettled investors already concerned about interest rates, leading to significant drops in France's CAC 40 index and pan-European STOXX 600 index.

European stocks dropped on Monday after French President Emmanuel Macron called a snap election following a heavy loss in the European Union vote to the far-right, rattling investors already worried about the interest rate outlook.

France's blue-chip CAC 40 index dropped 1.8% to touch a more than three-month low, with lenders including BNP Paribas, Societe Generale and Credit Agricole falling in the range of 3.8% and 5.5%. Yield spreads between benchmark Bund and euro area government bonds widened after Eurosceptic nationalists made gains in European Parliament elections on Sunday, prompting a bruised Macron to call a snap national election.

The pan-European STOXX 600 index fell 0.7% by 0711 GMT, with regional markets including Germany's DAX and Spain's IBEX down 0.7% and 1.0%, respectively. Equity markets came under pressure on Friday after a stronger-than-anticipated U.S. jobs report fanned worries that the Federal Reserve would not cut interest rates anytime soon.