European stocks moved sharply lower again Tuesday, as concerns over the U.K.'s Brexit vote gripped the market after three London asset manages suspended trading in a property funds.
A more than 4% slide in oil prices further hurt the investment mood.
U.K. fund fears: The financial sector posted the biggest losses in Europe, after three U.K. asset managers froze funds exposed to U.K. property because of a rapid increase in redemptions following the June 23 EU referendum.
The Bank of England also noted in its Financial Stability Report out earlier on Tuesday "that some risks have begun to crystallize" in the aftermath of the vote. In an effort to soothe the economy through bank lending, the central bank cut the so-called countercyclical capital buffer for banks to zero from 0.5%.
U.S. stock investors quashed a four-session rally Tuesday as Brexit-related uncertainties resurfaced to spook the market, on a day marked by light-trading volume following Independence Day.
A sharp drop in crude-oil prices contributed to the overall sentiment, weighing on energy shares.
The S&P 500 index SPX, -0.68% lost 14.40 points, or 0.7%, to close at 2,088.55.
The Dow Jones Industrial Average DJIA, -0.61% fell 108.75 points, or 0.6%, to end at 17,840.62, bouncing back from its intraday low of 17,785. The Nasdaq Composite COMP, -0.82% lost 39.67 points, or 0.8%, to close at 4,822.90, after trading as low as 4,797.
Asian share markets turned tail on Wednesday as fears over instability in the European Union returned with a vengeance, sending the pound to three-decade lows and hammering risky assets of all stripes.
Spooked investors rushed into safe-haven sovereign debt and took markets deeper into unknown territory.
"Financial markets appear to have taken a more realistic view around the complexity and uncertainty characterizing the global political background and its impact on already lackluster economic growth," wrote analysts at ANZ in a note.