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European stocks closed sharply lower on Friday, tracking a negative session for global equities as a deteriorating macroeconomic backdrop threatens earnings prospects.

The Euro Stoxx 50 index dropped 1.5% to 6,229 points, its lowest level in about two months, while the Stoxx Europe 600 index fell 1.2% to 635.3 points.

Natural gas and fuel prices rebounded amid signs of an escalation in the Iran war and a warning from Saudi Arabia that it will not have sufficient oil supplies for European refineries next month.

Sovereign bond yields rose sharply amid consolidated bets that the European Central Bank (ECB) will continue to raise interest rates.

Consequently, credit-sensitive sectors incurred losses, with shares of Santander, BNP Paribas, and Deutsche Bank dropping by more than 3% each.

German automakers' shares also declined, with Mercedes-Benz, Volkswagen, and BMW tumbling by 5% each.

On the other hand, a global respite for artificial intelligence infrastructure stocks lifted shares of ASML and Infineon by 1.5% and 2.5%, respectively.