European stock markets closed lower Wednesday as jitters remained over the U.S. debt ceiling bill ahead of the June 5 deadline.
The Stoxx 600 index closed the session down 1.1%, with all sectors and major bourses in negative territory. Autos stocks led the losses, down 2.5%, with chemicals stocks 2% lower.
European markets
After passing a key procedural vote in the House Rules Committee on Tuesday, the Fiscal Responsibility Act is provisionally scheduled to face a floor vote in the Republican-majority House around 8:30 p.m. ET Wednesday.
It then needs to pass the Democratic-controlled Senate before Monday, when the U.S. Treasury predicts it will not have enough money to meet its debt obligations.
The nonpartisan Congressional Budget Office on Tuesday estimated the bill would see budget deficits "reduced by about $1.5 trillion" over the next decade, in line with party projections — potentially providing it with additional support.
Tech stocks continue to see a boost from excitement around U.S.-listed Nvidia, which briefly hit a $1 trillion market cap on Tuesday following its better than expected results.
Flash figures Wednesday morning showed inflation in France cooled to 6% in May, down from 6.9% in April. Prices were 0.1% lower month on month in the index comparing inflation across the euro zone. The figures were lower than forecast in a Reuters poll of economists.
German inflation data will be out in the afternoon, ahead of a euro zone flash reading on Thursday.
Investors are also assessing data out of China, where the manufacturing purchasing managers' index declined for a second straight month and at a faster rate than expected; and property pricing and transactions "weakened sharply."
Hong Kong's Hang Seng index dropped 2% to a 2023 low, and mainland Chinese and Japanese markets were lower.
"We've had quite a strong run in global equity markets and a lot of that has been in anticipation of stronger earnings. We've had some alleviation on the inflation front and that's given hopes that we might see a pivot coming in by the Fed earlier than expected," Aneeka Gupta, equity and commodity strategist at WisdomTree Europe, told CNBC.
"What's now concerning markets is the ongoing debt ceiling, that seems to be front and center, and that is weighing on sentiment to a great deal. We've also been going quite a lot back and forth on inflation, the data shows inflation is coming off quite clearly but the [Personal Consumption Expenditures] index showing slight increases. That concerns investors the Fed is not done."
U.S. stock futures were lower Wednesday.
— CNBC's Christina Wilkie and Emma Kinery contributed to this report