European and US markets extended losses Wednesday as traders grappled with fears the resurgent Covid-19 cases could imperil economies' recoveries, while aluminum prices hit a 13-year high after the coup in top global producer Guinea.
In Asia, hopes for more Japanese stimulus helped Tokyo extend a recent rally.
Besides concerns over the coronavirus and its fast-spreading Delta variant, sentiment on Wall Street was harmed by a Federal Reserve report saying economic growth "downshifted slightly" in July and August amid shortages of workers and materials.
"Supply-side constraints both in the labor and product markets became more widespread. The number of mentions of supply shortages or cost pressures greatly outnumbered mentions of Covid, pandemic or vaccines in the report," Kathy Bostjancic of Oxford Economics said.
The Dow and S&P 500 closed slightly lower while the Nasdaq lost 0.6 percent. Frankfurt fell 1.5 percent while London and Paris lost just under one percent.
In Europe, markets were also monitoring expectations for the beginning of the end of pandemic central bank support measures -- which the Fed said it could also begin by the end of this year.
"Tomorrow's European Central Bank rate meeting could well be an interesting affair given comments released earlier today from Austrian governing council member Robert Holzmann, who warned that the central bank might normalise policy sooner than markets expect," said Michael Hewson, chief market analysts at CMC Markets UK.
Investors have been fixated for weeks on when central banks will begin to taper their stimulus support as economies recover and inflation accelerates.
However US government employment data showed job creation slowed considerably in the world's largest economy last month, possibly due to a surge in the number of Covid-19 cases, which many analysts took as a sign the Fed may take its time on tapering.
In commodities trading, prices of aluminium hit $2,807.50 in Asian trade on the London metals market -- the highest since 2008 -- amid supply concerns following the coup in Guinea, which has the world's largest reserves of bauxite from which the metal is made.
- Positive vibes in Japan -
Bitcoin recovered, sitting at around $46,100 after seeing wild fluctuations on Tuesday as El Salvador became the first country to use it as legal tender.
The unit had plunged by almost a fifth to as low as $43,000 after a technical issue hit the official digital wallet on vast consumer demand, though that was later resolved.
Tokyo's Nikkei 225 ended above 30,000 points for the first time since April after Japan's Prime Minister Yoshihide Suga last week said he would stand down, raising hopes his successor will introduce fresh economic stimulus.
On Wednesday, one of the front-runners, Fumio Kishida, pledged to push for trillions of yen in investment if he takes the post.
Data showing growth in the second quarter was better than first thought added to the positive vibes in Japan.
The Nikkei has risen around five percent since the Suga news broke, putting the index on course for a three-decade high.
- Key figures around 2040 GMT -
New York - Dow: DOWN 0.2 percent at 35,031.07 (close)
New York - S&P 500: DOWN 0.1 percent at 4,514.07 (close)
New York - Nasdaq: DOWN 0.6 percent at 15,286.63 (close)
EURO STOXX 50: DOWN 1.1 percent at 4,177.15 (close)
London - FTSE 100: DOWN 0.8 percent at 7,095.53 (close)
Frankfurt - DAX 30: DOWN 1.5 percent at 15,610.28 (close)
Paris - CAC 40: DOWN 0.9 percent at 6,668.89 (close)
Tokyo - Nikkei 225: UP 0.9 percent at 30,181.21 (close)
Hong Kong - Hang Seng Index: DOWN 0.1 percent at 26,320.93 (close)
Shanghai - Composite: FLAT at 3,675.19 (close)
Dollar/yen: DOWN at 110.24 yen from 110.30 yen at 2050 GMT
Pound/dollar: DOWN at $1.3773 from $1.3786
Euro/dollar: DOWN at $1.1815 from $1.1847
Euro/pound: DOWN at 85.77 pence from 85.90 pence
Brent North Sea crude: UP 1.4 percent at $72.69 per barrel
West Texas Intermediate: UP 1.6 percent at $69.41 per barrel