European and US stock markets swooned into the red Monday on downbeat US economic data and news of fresh US tariffs against Argentina and Brazil.
Asian markets had been cheered earlier in the day by a surprise jump in Chinese factory activity, but the party ended with a tweet by US President Donald Trump.
Trump tweeted that owing to unfair policies by Brazil and Argentina, he would reinstate tariffs on steel and aluminium from those countries.
"It doesn't take a genius to guess how investors reacted," said analyst Connor Campbell at Spreadex.
"Reversing their early gains, the eurozone indices all sank into the red, joined by an irritated Dow Jones," he noted.
Trade-related concern was also stoked by China's Global Times newspaper, which said Beijing wanted all US tariffs rolled back as part of a mini deal, a move observers said Washington is unlikely to agree to.
On Saturday, China said its manufacturing sector expanded in November for the first time in seven months, providing a boost to investors looking for signs of optimism in the world's second biggest economy.
Another survey Monday of smaller firms also showed a better-than-expected pick-up in factory activity.
On oil markets, crude prices came back from sharp losses last week after Iraq said top producers might announce an output cut soon.
On foreign exchange markets, the euro rose against the dollar after a survey revealed that the US manufacturing sector has contracted for a fourth straight month, which put more pressure on eurozone stocks because many companies would be hampered by the stronger single currency.
- 'Very bitter trade pill' -
Some analysts had already raised concerns about an article in the Communist Party-linked Global Times, which tweeted that the government wants levies imposed on China to be removed as the US talks continue. It also said leaders wanted tariffs lined up for December 15 to be taken off the table.
But OANDA senior market analyst Jeffrey Halley said: "It is hard to see the US swallowing a very bitter trade pill like that; it would, in effect, remove all of the US's leverage in the far more difficult comprehensive trade negotiations to come."
On oil markets, both main contracts rallied after Iraq said Sunday that OPEC and other major producers would consider slashing output by 400,000 barrels a day to support prices when they meet in Vienna this week.
- Key figures around 1645 GMT -
London - FTSE 100: DOWN 0.8 percent at 7,285.94 points (close)
Frankfurt - DAX 30: DOWN 2.1 percent at 12,964.68 (close)
Paris - CAC 40: DOWN 2.0 percent at 5,786.74 (close)
EURO STOXX 50: DOWN 2.1 percent at 3,626.66
Tokyo - Nikkei 225: UP 1.0 percent at 23,529.50 (close)
Hong Kong - Hang Seng: UP 0.4 percent at 26,444.72 (close)
Shanghai - Composite: UP 0.1 percent at 2,875.81 (close)
New York - Dow: DOWN 0.8 percent at 27,824.35
Euro/dollar: UP at $1.1089 from $1.1018
Pound/dollar: UP at $1.2935 from $1.2925
Euro/pound: UP at 85.73 pence from 85.24
Dollar/yen: DOWN at 109.01 from 109.49 yen
Brent North Sea crude: UP 1.0 percent at $61.09 per barrel
West Texas Intermediate: UP 1.4 percent at $55.93 per barrel