Stock markets slumped Tuesday on geopolitical risks stretching from US tensions with Russia and Saudi Arabia to trade issues with China, as well as Italy’s budget stand-off with the European Union.
European stocks picked up where Asia left off, with Frankfurt closing more than two percent lower, after Hong Kong lost more than three percent.
Wall Street also saw sharp drops early in the session, although major US indices gradually recovered some ground to finish with only modest losses. 
Mixed US corporate earnings, prompting declines in Dow members Caterpillar and 3M, added to geopolitical angst among investors, dealers reported. 
‘Turning chicken’
‘US equity markets turned sharply lower as investors turned chicken to the tune of some very risk-off mood music,’ said Neil Wilson at
The dollar was lost ground against the euro, yen and pound.
The price of gold, which is typically in demand in times of uncertainty, pushed higher, while oil prices tumbled after Saudi Arabia signaled it was ready to boost oil output.
Participating in Frankfurt’s plunge was a share price drop in chemicals and pharmaceuticals giant Bayer after a San Francisco judge on Monday upheld a jury verdict that found Bayer-owned Monsanto liable for not warning a groundskeeper that its weed killer product Roundup might cause cancer.
Judge Suzanne Bolanos denied Monsanto’s request for a new trial but cut the $289 million damages award to $78 million to comply with the law regarding how punitive damages awards must be calculated.
Bayer said it would appeal the latest ruling.
There is growing unease meanwhile about Italy’s row with the EU over its purse-busting budget, which Brussels said breaks the bloc’s financial rules.
‘Collision course’
The populist government in Rome has refused to back down and cut its spending promises despite warnings about the country’s economic outlook.
The EU Commission rejected Italy’s draft budget, the first time the EU executive has ever sent a member state back to the drawing board over spending plans.
‘We doubt that the Italian government will alter its budget sufficiently to placate the Commission, suggesting that the two remain on a collision course,’ Capital Economics said in a note to clients.
Turkish President Recep Tayyip Erdogan on Tuesday said that the ‘savage murder’ of journalist Jamal Khashoggi at the Saudi consulate in Istanbul was meticulously planned, demanding that all those linked to the killing face punishment.
Oil prices slid Tuesday as the market discounted concerns about potential supply disruptions in the Middle East following remarks by Saudi Energy Minister Khalid al-Falih suggesting output would stay high.
Key figures around 2040 GMT
New York – Dow: DOWN 0.5 percent at 25,191.43 (close)
New York – S&P 500: DOWN 0.6 percent at 2,740.69 (close)
New York – Nasdaq: DOWN 0.4 percent at 7,437.54 (close)
London – FTSE 100: DOWN 1.2 percent at 6,955.21 (close)
Frankfurt – DAX 30: DOWN 2.1 percent at 11,284.92 (close)
Paris – CAC 40: DOWN 1.7 percent at 4,967.69 (close)
EURO STOXX 50: DOWN 1.5 percent at 3,140.94 (close)
Tokyo – Nikkei 225: DOWN 2.7 percent at 22,010.78 (close)
Shanghai – Composite: DOWN 2.3 percent at 2,594.83 (close)
Hong Kong – Hang Seng: DOWN 3.1 percent at 25,346.55 (close)
Euro/dollar: UP at $1.1472 from $1.1464 at 2100 GMT
Pound/dollar: UP at $1.2985 from $1.2963
Dollar/yen: DOWN at 112.41 from 112.82 yen 
Oil – Brent Crude: DOWN $3.39 at $76.44 per barrel 
Oil – West Texas Intermediate: DOWN $2.93 cents at $66.43 per barrel