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|European stock markets wary before Trump-Juncker trade talks, Photo: STAN HONDA, AFP/Getty Images|
The dollar rose against the euro, while bitcoin briefly broke through $8,300 before slipping back.
Oil prices rose following a government report showing a decline in US crude inventories.
European Commission President Jean-Claude Juncker was to meet US President Donald Trump later on Wednesday in Washington in an attempt to avert an escalation of tariffs.
"An apprehensive day for financial markets has seen significant selling throughout European stocks ahead of a key US-EU meeting," said IG market analyst Joshua Mahony.
"With Trump and Juncker set for trade discussions in Washington later, the pessimistic stance seen within markets is certainly warranted given the acrimonious tone taken in previous meetings," he added.
European stocks ended the day lower. On Wall Street, the Dow was down 0.3 per cent in late morning trading although both the S&P 500 and Nasdaq Composite were in the green.
Mahony noted the decline in Boeing and General Motors highlighted the difficulty manufacturers are currently experiencing amid growing trade war.
Boeing warned of higher costs and GM cut its profit forecast as it said higher commodity costs would squeeze its margins.
Trump has threatened to step up his trade war, with European cars in the crosshairs and all of China's US$500 billion of exports to the US.
In what appeared to be the first acknowledgement that Trump's aggressive trade strategy was hurting ordinary Americans, the US government on Tuesday announced US$12 billion in aid for farmers who have been the main target of retaliatory measures.
Juncker said he was "not very optimistic" about the outcome of his talks with Trump.
"I know Mr Trump pretty well. I have met him frequently and know how to deal with him and know how he deals with others. We will negotiate as equals," Juncker told German public broadcaster ZDF.
FIAT SKIDS LOWER
Shares in Fiat-Chrysler plunged more than 15 per cent in Milan trading after the automaker disappointed the markets with a drop in net profits, although for the first time it had generated positive cash flow.
The results were published shortly after it was announced that Sergio Marchionne, who helped turn around Fiat and merged it with US car manufacturer Chrysler, had died. The 66-year-old stepped down at the weekend following complications from surgery.
Forex.com market analyst Fawad Razaqzada said shares in Fiat-Chrysler and GM fell sharply after both carmakers "lowered their outlooks due in part to soaring input costs as a result of surging steel and aluminium costs" following US tariffs.
GM shares were down 7.3 per cent in midday trading in New York.
Key figures at 1530 GMT:
New York - Dow: DOWN 0.3 per cent at 25,171.68 points
London - FTSE 100: DOWN 0.7 per cent at 7,658.26 (close)
Frankfurt - DAX 30: DOWN 0.9 per cent at 12,579.33 (close)
Paris - CAC 40: DOWN 0.1 per cent at 5,426.41 (close)
EURO STOXX 50: DOWN 0.5 per cent at 3,464.80
Tokyo - Nikkei 225: UP 0.5 per cent at 22,614.25 (close)
Hong Kong - Hang Seng: UP 0.9 per cent at 28,920.90 (close)
Shanghai - Composite: DOWN 0.1 per cent at 2,903.65 (close)
Euro/dollar: DOWN at US$1.1673 from US$1.1687 at 2100 GMT
Pound/dollar: UNCHANGED at US$1.3145
Dollar/yen: DOWN at 110.93 yen from 111.20 yen
Oil - Brent Crude: UP 24 cents at US$73.68 per barrel
Oil - West Texas Intermediate: UP 24 cents at US$68.76 per barrel