The Protestant Reformation across Europe had caused Protestantism to spread to the Spanish holdings in the Low Countries. This wasn't helped by Queen Elizabeth I of England adopting Protestantism as the state religion of England.
The Dutch, who were subject to Spain within the Low Countries, had begun open Rebellion against the Spanish Crown. King Phillip II von Habsburg, King of Spain, Portugal, Naples, and Sicily, sought to defend the Catholic Church by putting down these Protestant revolts, and to restore Catholicism to the Low Countries.
However, Queen Elizabeth I had been secretly supporting the Dutch Rebels, and had promised them with Military Support, as well as subsidies, in exchange for three Cautionary towns. Philip II took this as an open Declaration of War.
The Anglo Spanish War
The Undeclared yet clearly occurring war began when Spain seized all British Merchant ships in Spanish Harbors. This was responded with Sir Francis Drake partaking in a Privateering voyage in the Spanish New World. He sailed for Santo Domingo in Hispaniola, seeking to Capture and Loot the City.
Drake's assault on the Colonial city would have been a great success, if it weren't for the ship Alvaro de Luna. The Alvaro de Luna was returning from combatting Pirates off the coast of Trinidad, and was returning to its home port of Santo Domingo for repairs. During the voyage, the Alvaro de Luna spotted several ships flying the Flag of England, and returned with all haste to Santo Domingo. The city now warned of Drake's fleet, Santo Domingo prepared its defenses, as well as deployed its Armada. They also sent word to the nearby Viceroyalty of Cuba for further Naval assistance.
When Drake arrived at Santo Domingo, he wasn't expecting the City to be ready for him, and was caught completely off guard when the assorted warships present opened fire on his Privateer fleet. This was a disastrous defeat for Drake's fleet, and Drake himself was killed by a cannonball during the battle. The remnants of his fleet limped back to England.