On Wall Street, the S&P 500 index fell 17.57 points, or 0.6%, to 2,878.20. The Dow Jones Industrial Average dropped 190.44 points, or 0.7%, to 26,150.58. The Nasdaq composite slid 44.61 points, or 0.6%, to 7,909.28. The Russell 2000 index of small-cap stocks gave up 19.32 points, or 1.2%, or 1,559.68.
European indexes also finished broadly lower, giving up early gains, after the U.S. threatened to impose $11.2 billion in tariffs on European products, including cheese, wine and helicopters. The threat from President Donald Trump could make investors even more concerned about trade disputes hurting an already slowing global economy at a time when the U.S. is trying to resolve a trade conflict with China.
That spat has already made a list of goods more expensive for consumers and is weighing on an already slowing Chinese economy. Negotiators met again last week and both sides have said they are making progress.
Traders also were disappointed to see that the International Monetary Fund lowered its forecast for global growth this year. The IMF now projects 3.3% global growth in 2019, matching the weakest year since 2009. The U.S. fared particularly poorly in the report, with growth now expected at 2.3%, down from 2.9% in 2018.
Investors will get more clues about the Fed's intentions Wednesday, when the central bank releases minutes from its latest policy meeting. The European Central Bank will also meet Wednesday. "Amid the sporing of growth and trade tension concerns once again, sentiments in Asia markets have once again been undermined," said Jingyi Pan, market strategist at IG in Singapore.
ENERGY: Benchmark U.S. crude rose 25 cents to $64.23. It fell 0.7% to settle at $63.98 a barrel Tuesday. Brent crude added 21 cents to $70.82 a barrel. CURRENCIES: The dollar fell to 111.15 yen from 111.28 yen Tuesday. The euro inched down to $1.1266 from $1.1277.
AP Business Writer Alex Veiga contributed to this report.
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