Wall Street and European stock markets retreated on Wednesday as worries about higher oil prices and possible additional interest rate hikes weighed on sentiment.
Wall Street indices spent the entire session in the red, with the S&P 500 finishing 0.7 percent lower.
A surprisingly solid reading on US services sector activity in August pushed Treasury bond yields higher, with investors reading the report as supporting the "Fed's thinking that rates need to stay higher for longer," said Briefing.com.
Steve Sosnick of Interactive Brokers said the market was struggling to gain traction amid "a general feeling that we've come a long way and we don't have a lot of positive catalysts right now."
Europe's main equity markets also ended the day lower.
The European Central Bank is due to announce its latest monetary policy decision next week, followed by the Bank of England and the US Federal Reserve one week later.
Bank of England Governor Andrew Bailey refused to exclude the possibility of further rate hikes in remarks to lawmakers on Wednesday.
"I think we are much nearer now to the top of the cycle" of interest rate hikes, he said.
"And I'm not therefore saying we're at the top of the cycle because we've got a meeting to come but I think we are much nearer to it," he added.
Crude oil prices pushed higher, adding to the advance after key OPEC+ producers Russia and Saudi Arabia extended supply cuts to the end of the year in efforts to boost their revenues.
Elsewhere on Wednesday, data showed German factory orders fell more than expected in July, in the latest setback for Europe's largest economy as it grapples with an industrial slowdown.
But London investors set aside survey numbers showing modest August growth in the UK construction sector.
Traders also kept tabs on Tokyo after the dollar jumped to a 10-month peak against the yen on increased US rate hike expectations, and above the levels that led officials to step in with support last year.
Japan's vice finance minister for international affairs Masato Kanda made a verbal intervention, saying authorities were ready to take action when needed.
The yen has bounced back but remains under pressure, with the Bank of Japan's ultra-loose monetary policy, notably no rate hikes, expected to keep it from rallying much higher.
Among individual companies, Apple shares fell 3.6 percent following a Wall Street Journal report that China barred the use of its smartphones in central government agencies.
Apple also found itself in the crosshairs of a new European Union policy to toughen regulation of large tech names. Shares in other US giants such as Amazon, Google parent Alphabet and Facebook owner Meta slipped as well.
- Key figures around 2030 GMT -
New York - Dow: DOWN 0.6 percent at 34,443.19 (close)
New York - S&P 500: DOWN 0.7 percent at 4,465.48 (close)
New York - Nasdaq: DOWN 1.1 percent at 13,872.47 (close)
London - FTSE 100: DOWN 0.2 percent at 7,426.14 (close)
Frankfurt - DAX: DOWN 0.2 percent at 15,741.37 (close)
Paris - CAC 40: DOWN 0.8 percent at 7,194.09 (close)
EURO STOXX 50: DOWN 0.7 percent at 4,238.26 (close)
Tokyo - Nikkei 225: UP 0.6 percent at 33,241.02 (close)
Hong Kong - Hang Seng Index: FLAT at 18,449.98 (close)
Shanghai - Composite: UP 0.1 percent at 3,158.08 (close)
Euro/dollar: UP at $1.0727 from $1.0722 on Tuesday
Dollar/yen: DOWN at 147.67 yen from 147.72 yen
Pound/dollar: DOWN at $1.2504 from $1.2564
Euro/pound: UP at 85.76 pence from 85.33 pence
West Texas Intermediate: UP 1.0 percent at $87.54 per barrel
Brent North Sea crude: UP 0.6 percent at $90.60 per barrel