Stocks sink as rally over eased trade tensions fades
London, Paris and Frankfurt all closed lower, following Asia down.
New York was trading in similar red territory.
Much of the focus on Wall Street was on Nvidia, the US chipmaker, whose earnings report — to be released after New York's close — was being viewed as a bellwether for tech stocks generally.
'This is expected to be another quarter of monster revenue for Nvidia, however it may lead to the familiar question, can these results continue?' asked Kathleen Brooks, research director at XTB.
She and others pointed to uncertainty over US restrictions on semiconductor exports, against a backdrop of effervescent chip demand as artificial intelligence development accelerates.
Crude prices surged more than two percent, ahead of an OPEC meeting to discuss output and hiked tensions over Russia and Iran.
President Donald Trump's rare rebuke Tuesday of Russian counterpart Vladimir Putin over stepped-up attacks on Ukraine — saying he was 'playing with fire' — raised the prospect of tougher US sanctions on Russian energy and banking sectors.
US-Iran talks on curbing Tehran's nuclear programme have also yielded no breakthrough so far, additionally fuelling speculation of tightened sanctions.
The US dollar picked up against major currencies, but analysts said that masked a fundamental weakness in the greenback, and in the US debt market, evident in recent weeks.
'It's the creeping realisation that US assets no longer provide the same refuge' they used to, said Stephen Innes of SPI Asset Management. 'Dollar strength is no longer reflexive — it's contested.'
Europe and Asia were down after a rally over the previous two days triggered by Trump's announcement he was pausing threatened 50-percent tariffs on the European Union to give space to trade negotiations.
'The market no longer takes Trump at his word when he delivers swathing tariff hikes seemingly at random,' said Brooks.
David Morrison, senior market analyst at Trade Nation, said: 'It looks as if investors are looking past tariffs, assuming that all will be for the best, in the best of all worlds. This Panglossian view could be severely tested, and a US-EU deal could prove hard to achieve.'
In Europe, auto giant Stellantis, which makes Jeep, Peugeot, Chrysler and Fiat vehicles, named a new CEO — its North America chief Antonio Filosa — to succeed Carlos Tavares, who was sacked in December.
'To give him full authority and ensure an efficient transition, the Board has granted him CEO powers effective June 23,' the company said.
Stellantis shares closed more than two percent down.
A Financial Times report that European Central Bank President Christine Lagarde had discussed leaving her post early to take the helm of the World Economic Forum had little impact on the euro.
'It is trading in a relatively tight range, suggesting that reports Christine Lagarde may not fulfill her full term at the ECB is not having an impact on European markets,' said XTB's Brooks.
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