Most global stock markets fell Wednesday after US President Donald Trump left investors hanging over prospects for progress in trade talks with China.
Asian trading suffered also from violent Hong Kong protests that showed no sign of letting up, while US investors evaluated testimony by Fed chairman Jerome Powell before Congress.
The head of the US Federal Reserve told lawmakers the US economy would probably continue to grow, but faced risks from a global slowdown and trade disputes.
In the first of back-to-back days of testimony before Congress, Powell reaffirmed that the central bank is on hold after cutting the benchmark lending rate three times this year.
Powell consistently declines to respond to repeated criticism by Trump but in a veiled aside to start his prepared testimony he said the Fed has been granted independence to conduct monetary policy "based on facts and objective analysis."
On Tuesday, Trump had hailed a strong US economy and said a trade deal with China was close, but also warned that he could ramp up tariffs if things did not go his way.
Global equities have been gaining strength on optimism the economic superpowers will unveil a "phase one" deal as the first part of a wider agreement that could support economies worldwide.
"We're close. A significant phase one trade deal with China could happen, it could happen soon," Trump said during an address at the Economic Club of New York.
But he then warned: "If we don't make a deal, we're going to substantially raise those tariffs.
"That’s going to be true for other countries that mistreat us too," he added.
The remarks threw a wet blanket on hopes that he would provide a positive update on the trade talks.
"The US President merely suggested that a phase one deal "could" happen soon and that China wanted it so badly," remarked Fawad Razaqzada, a market analyst at Forex.com.
In Europe, the London stock market index closed with a small loss of almost 0.2 percent, Paris also gave up around 0.2 percent and Frankfurt was down by 0.4 percent.
In afternoon New York trades, the Dow index was 0.1 percent higher, however.
- Hong Kong's night of rage -
Underscoring global gloom meanwhile was concern about unrest in Hong Kong, which had suffered a night of rage as months of protests enter a more violent phase.
Police warned the rule of law there was on "the brink of total collapse".
Hong Kong's Hang Seng Index plunged by 1.8 percent, having shed a similar amount on Monday before staging a small rebound on Tuesday.
- Key figures around 1645 GMT -
London - FTSE 100: DOWN 0.2 percent at 7,351.21 points (close)
Frankfurt - DAX 30: DOWN 0.4 percent at 13,230.07 (close)
Paris - CAC 40: DOWN 0.2 percent at 5,907.09 (close)
EURO STOXX 50: DOWN 0.6 percent at 3,689.40
Tokyo - Nikkei 225: DOWN 0.9 percent at 23,319.87 (close)
Hong Kong - Hang Seng: DOWN 1.8 percent at 26,571.46 (close)
Shanghai - Composite: DOWN 0.3 percent at 2,905.24 (close)
New York - Dow: UP 0.1 percent at 27,6728.76
Pound/dollar: DOWN at $1.2838 from $1.2845 at 2100 GMT
Euro/pound: UP at 85.74 from 85.70 pence
Euro/dollar: DOWN at $1.1006 from $1.1009
Dollar/yen: DOWN at 108.81 yen from 109.01 yen
Brent North Sea crude: UP 0.7 percent at $62.38 per barrel
West Texas Intermediate: UP 0.7 percent at $57.21