European markets closed slightly lower on Tuesday as traders monitored geopolitical developments on both sides of the Atlantic.
The pan-European Stoxx 600 ended the session just below the flatline, with travel and leisure stocks adding 1% to lead gains.
Stocks in the sector rallied on Tuesday on the back of British travel firm Thomas Cook's collapse a day earlier, with the U.K.'s Tui gaining 6.5% to surge to the top of the index.
Markets were also largely attuned to political developments.
In a landmark case on Tuesday, the U.K.'s highest court ruled that Prime Minister Boris Johnson's suspension of parliament for five weeks until October 14 was unlawful. Sterling traded 0.3% higher at around $1.2466 on the back of the news, while the FTSE 100 shed nearly 0.5%.
The Supreme Court also determined that the prorogation of parliament was null and void and said the speakers of both parliamentary houses must now decide what to do next. House of Commons Speaker John Bercow told reporters shortly afterwards that lawmakers would return to parliament on Wednesday.
Traders were also largely focused on news around the U.S.-China trade spat. Treasury Secretary Steven Mnuchin said on Monday that talks between Washington and Beijing would resume in two weeks.
The U.S. finance official appeared to be contradicted publicly by President Donald Trump earlier in the day. Mnuchin said that last week's visit from Chinese officials had been cut short on the request of U.S. officials, to which Trump responded "why?"
Elsewhere, Trump said in an address to the U.N. on Tuesday that there was a path to peach with Iran, despite denouncing the country's "blood lust."
Stocks on Wall Street were trading mixed on Tuesday as investors became cautiously optimistic about Sino-U.S. trade talks.
In corporate news, Belgian brewer Anheuser-Busch InBev priced the initial public offering of its Asian business at HK$27 a share, the bottom of an indicative range, sources told CNBC. The move means the firm will raise up to $5 billion in the float.
Meanwhile German prosecutors have charged Volkswagen CEO Herbert Diess, former CEO Martin Winterkorn and Chairman Hans Dieter Poetsch with stock market manipulation related to the carmaker's emissions cheating scandal.
On the data front, Germany's Ifo business climate index offered a slight improvement Tuesday morning, rising to 94.6 points from 94.3 points in August. However, companies' expectations fell to 90.8 points from 91.3 points in August, hitting its lowest level since June 2009.
At the other end of the European blue chip index, asset manager Investec slid 7% amid challenging market conditions and an anticipated fall in profits for the six months up to the end of September.
K+S shares fell almost 5% after the German chemicals company issued a profit warning on Monday, prompting various brokers to cut their price targets for the stock.