European equities weakened on Monday, with the pan-European STOXX 600 easing 0.1% as a sharp military escalation in the Middle East lifted crude prices above $90 a barrel. Energy majors gained, but failed to offset broader selling across continental markets as investors absorbed higher geopolitical risk premiums and elevated interest-rate expectations on both sides of the Atlantic. Crude futures rose nearly 3% to about $90.60 a barrel after U.S. forces struck two Iranian rocket launchers on Larak Island in the Strait of Hormuz. Iranian forces retaliated against U.S. military positions in Jordan, ending a brief lull in hostilities and reducing hopes for an immediate diplomatic arrangement to protect commercial shipping through the strategic waterway. The oil surge renewed concerns about cost-push inflation for European industrial companies. Fed funds futures now imply a 60% probability of a 25-basis-point rate increase at the Federal Reserve's Sept. 16 meeting, up from 35% before Federal Reserve Chair Kevin Warsh's warning at Jackson Hole that policymakers still had work to do to contain inflation. Markets are preparing for U.S. labor-market and ISM survey data this week, including Tuesday's July JOLTS report, Wednesday's August ADP private-payrolls report and Friday's nonfarm-payrolls report, which is expected to show a hiring recovery. Speeches from Fed Governors Michael Barr and Christopher Waller will also be monitored for evidence of broader support for Warsh's hawkish position ahead of the August CPI report due Sept. 11. European markets are likewise awaiting Eurozone inflation data, which is expected to show persistent underlying price pressures and reinforce expectations for another 25-basis-point European Central Bank rate hike at its Sept. 10 Governing Council meeting. Germany's DAX fell 0.5%, France's CAC 40 rose 0.1%, and London markets were closed for a holiday.