。
The unexpected turn of events left everyone bewildered.
Literal
Unexpected-[appositive-の] situation [by-に] people [topic-は] become-bewildered-[past-した].
予想外 ('unexpected,' literally 'outside prediction') uses the productive 外 suffix — 想定外 (unforeseen), 国外 (abroad), 課外 (extracurricular). 困惑する ('to be bewildered, be at a loss, be confused') takes an に-marked cause, not を. The noun 事態 ('state of affairs, situation') is more formal than 状況 and carries a nuance of seriousness or concern.