Global stocks retreated Thursday on continued doubts about US-China trade talks while the OECD slashed its growth outlook, citing the protracted trade conflict.
Investors, already nervous about the slow progress of the talks, became even more cautious after both houses of Congress overwhelmingly approved a bill supporting the pro-democracy movement in Hong Kong and sent it to be signed by US President Donald Trump.
"A third day in the red for equity markets as the US-China trade deal, or lack of, continues to dictate market sentiment," said Craig Erlam, senior market analyst at Oanda trading group.
Major European markets closed in the red, along with Wall Street.
China on Thursday accused the United States of seeking to "destroy" Hong Kong and threatened retaliation after Congress passed legislation supporting the pro-democracy movement that has thrown the city into nearly six months of turmoil.
Foreign Minister Wang Yi said passage of the Hong Kong Human Rights and Democracy Act "indulges violent criminals" that China blames for the worsening unrest and aims to "muddle or even destroy Hong Kong."
On the other hand, citing unnamed sources, The Wall Street Journal reported Thursday that Chinese trade envoy Liu He had invited US trade officials to Beijing for a new round of talks.
US officials are reluctant to make the trip, however, without clear commitments from Beijing addressing key US complaints, according to the report.
- Sensitive markets -
"Recent moves in stock markets seem to be almost solely driven by the latest developments in US-Sino talks," said XTB chief market analyst David Cheetham.
"It's quite remarkable that stock markets in not only New York and Shanghai but also London and Frankfurt have such a heightened level of sensitivity in the near term to any news on this front."
Among individual share moves, investors cheered the market debut of stock in France's state-owned lottery monopoly, with eager buyers pushing the stock up sharply.
On the macro front, the OECD grouping of the world's wealthiest nations on Thursday trimmed its outlook for the global economy, saying the world was headed for its weakest economic growth since the 2007-2008 financial crisis.
Urging governments to invest in digital and climate transformation, the Organization for Economic Co-operation and Development said activity had been hobbled by weaker trade and investment in the past two years, as Trump and China continue to be locked in a trade conflict.
Oil prices rose as investors expected next month's OPEC summit to agree on an extension of current production cuts.
- Key figures around 2140 GMT -
New York - Dow: DOWN 0.2 percent at 27,766.29 (close)
New York - S&P 500: DOWN 0.2 percent at 3,103.54 (close)
New York - Nasdaq: DOWN 0.2 percent at 8,506.21 (close)
London - FTSE 100: DOWN 0.3 percent at 7,238.55 (close)
Frankfurt - DAX 30: DOWN 0.2 percent at 13,137.70 (close)
Paris - CAC 40: DOWN 0.2 percent at 5,881.21 (close)
EURO STOXX 50: DOWN 0.1 percent at 3,679.66 (close)
Tokyo - Nikkei 225: DOWN 0.5 percent at 23,038.58 (close)
Hong Kong - Hang Seng: DOWN 1.6 percent at 26,466.88 (close)
Shanghai - Composite: DOWN 0.3 percent at 2,903.64 (close)
Euro/dollar: DOWN at $1.1059 from $1.1073 at 2100 GMT
Pound/dollar: DOWN at $1.2907 from $1.2924
Euro/pound: DOWN at 85.67 pence from 85.68 pence
Dollar/yen: DOWN at 108.60 yen from 108.61 yen
Brent North Sea crude: UP 2.5 percent at $63.97 per barrel
West Texas Intermediate: UP 2.8 percent at $58.58 per barrel