European markets drop sharply after U.S. tech stocks plummet

Elliot Smith, Holly Ellyatt

European markets dropped sharply on Tuesday following a sell-off in U.S. tech stocks at the start of the week and as global markets turn their focus on inflation data.

The pan-European Stoxx 600 fell 2% by late morning with travel and leisure stocks plunging 4.5% to lead losses, as all sectors and major bourses slid into negative territory.

The tumble comes after negative trading sentiment in Asia-Pacific markets overnight following a sell-off in tech stocks on Monday that weighed down major U.S. indexes. U.S. stock futures are pointing to another negative open on Wall Street Tuesday.

Investors around the world are also focused on the latest inflation data this week; China released data Tuesday that showed consumer prices data in April jumped 0.9% from a year ago, slightly missing the 1% forecast by analysts in a Reuters poll. However, the producer price index rose 6.8%, beating the 6.5% projected by analysts polled by Reuters.

U.S. inflation data is released Wednesday amid growing concerns that the Federal Reserve will be prompted to tighten its monetary policy stance as prices rise along with the reopening of the global economy.


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