Global stock markets fell Thursday on escalating trade tensions with a profit warning from Daimler tied to US-China tariffs weighing on auto shares.
A day before the European Union was to slap retaliatory tariffs on a range of American benchmark products, including jeans and motorbikes, analysts said trade war fears were quickly turning into the real thing.
"We have a trade war -- and it's an escalating trade war," SEB chief economist Robert Bergqvist told AFP in an interview.
"Investors... are more cautious today, they are waiting for the right time to reduce their exposure in stock markets," he said.
Equity markets in Frankfurt and Paris fell more than one percent, while the Dow dropped for an eighth straight session. The blue-chip US index is composed of many companies seen as especially vulnerable to a trade war.
Automakers fell hard after luxury carmaker Daimler cut its profit forecasts for 2018, blaming new tariffs on cars exported from the United States to China.
The German company has major US plants that export to China. China plans higher levies on the vehicles in retaliation for US tariffs on Chinese goods.
Daimler itself fell 4.3 percent, while German rivals Volkswagen and BMW fell by similar margins.
US auto giants Ford and General Motors were also down, as was French company Renault.
Oil prices, meanwhile, dropped on the eve of an output decision from the Organization of the Petroleum Exporting Countries, the 14-nation cartel that pumps 40 percent of global crude.
Expectations are growing that OPEC will raise its collective production ceiling. However, Iran's oil minister walked out of a key meeting with OPEC peers, as a rift deepened with regional rival Saudi over its push to ramp up the cartel's oil output.
The British pound rallied after traders viewed a Bank of England monetary policy meeting as boosting the odds of an interest rate hike this summer.
This time, the vote to keep rates unchanged was 6-3, with three members voting to lift rates. Only two central bankers supported a hike at the last meeting.
"The bank kept its policies unchanged at this meeting, as expected, but the tone of the meeting was somewhat more hawkish than expected," said Silvia Dall'Angelo, senior economist at Hermes Investment management.
Among individual companies, Dow member Intel dropped 2.4 percent after Brian Krzanich resigned as chief executive over a consensual relationship with an employee that violated a company non-fraternization policy. Chief Financial Officer Bob Swan will serve as interim chief executive while the company searches for a replacement.
Online retailers fell after the US Supreme Court decided US states had broad rights to tax online sales of goods and services. Amazon fell 1.1 percent and eBay dropped 3.2 percent.
Key figures around 2100 GMT
New York - Dow Jones: DOWN 0.8 percent at 24,461.70 (close)
New York - S&P 500: DOWN 0.6 percent at 2,749.76 (close)
New York - Nasdaq: DOWN 0.9 percent at 7,712.95 (close)
London - FTSE 100: DOWN 0.9 percent at 7,556.44 (close)
Frankfurt - DAX 30: DOWN 1.4 percent at 12,511.91 (close)
Paris - CAC 40: DOWN 1.1 percent at 5,316.01 (close)
EURO STOXX 50: DOWN 1.1 percent at 3,403.37 (close)
Tokyo - Nikkei 225: UP 0.6 percent at 22,693.04 (close)
Hong Kong - Hang Seng: DOWN 1.4 percent at 29,296.05 (close)
Shanghai - Composite: DOWN 1.4 percent at 2,875.81 (close)
Euro/dollar: UP at $1.1607 from $1.1572 at 2100 GMT
Pound/dollar: UP at $1.3245 from $1.3172
Dollar/yen: DOWN at 109.96 yen from 110.36 yen
Oil - Brent Crude: DOWN $1.69 at $73.05 per barrel
Oil - West Texas Intermediate: DOWN 17 cents at $65.54 per barrel