The financial markets are again in bright red on Monday after closing their worst week since October 2020 on Friday.
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Paris plunged by 2.67%, Frankfurt by 2.43%, Milan by 2.79% and the European Eurostoxx 50 index dropped by 2.69%.
London fell 1.75% after the announcement of a 0.3% drop in British gross domestic product (GDP) in April.
Asia is also struggling.
Tokyo fell 3.01%, and the yen fell to its lowest level against the dollar since 1998. Shanghai lost 0.89% and Hong Kong fell 3.39%.
New containment measures in Shanghai and Beijing pose a threat to the world's second largest economy.
Last week was disastrous for the Paris market with a fall of 2.69% on Friday, and a weekly decline of 4.60%.
Soaring inflation
The bad wind came from the United States on Friday.
Inflation soared to 8.6% in May as analysts hoped for a lull.
The New York Stock Exchange immediately took the hit, taking all the major world markets in its wake.
Investors fear a new monetary tightening from the powerful Fed.
Tension is at its height as the US central bank is due to hold its monetary policy meeting on Tuesday and Wednesday.
An increase in its key rates of half a percentage point (or 50 basis points) already seems certain.
But faced with the slide in prices, the markets fear a more vigorous boost to key rates.
These data "risk pushing the Fed to adopt a more aggressive policy amplifying the risks to growth", worries Sebastian Paris Horvitz,
Very bad news
However, the rise in interest rates is very bad news for the equity markets.
They then find themselves in competition with bond markets, which become more attractive.
The Tina effect ("There is no alternative") which had largely contributed to propelling the stock market indices was stopped dead.
The pressure on interest rates also increases the cost of debt for companies.
The Paris Stock Exchange is also suffering the backlash of the first round of legislative elections.
The left-wing coalition led by Jean-Luc Mélenchon made a spectacular breakthrough in the first round of the legislative elections and almost tied with the Macron camp.
"Emmanuel Macron could lose his absolute majority in the French Parliament, which would force him to make compromises to advance the reforms," said John Plassard, investment specialist at Mirabaud.
But this prospect was relegated to the second rank of investor concerns.
