· Stocks fell on Wednesday as bond yields declined again, triggering concerns about the economic outlook. Increasing trade tensions in the China-U.S. trade fight also weighed on markets.

The Dow Jones Industrial Average dropped 221.36 points to 25,126.41 while the S&P 500 slid 0.7% to 2,783.02. The Nasdaq Composite declined by 0.8% 7,547.31. The Dow briefly fell more than 400 points as the 10-year Treasury note yield hit its low of the day.

The 10-year Treasury note yield fell to its lowest level since September 2017 before rebounding to about 2.26%. A portion of the yield curve further inverted as 3-month Treasury bills last yielded 2.36%, well above the 10-year rate. A yield curve inversion is seen by traders as a potential sign that a recession is in the horizon.

· European shares continued to tumble Wednesday amid worries over the U.S.-China trade war and a potential budget standoff between Italy and the EU.

The pan-European STOXX 600 was down 1.4% to its lowest point since March 11, basic resources leading the losses with a 2.5% decline as all sectors remained in the red.

Traders are taking a more cautious approach to risk assets, with the trade battle between Washington and Beijing proving to be a main point of anxiety for global markets.

· Back in Europe, fears of a coming political battle between Rome and Brussels returned this week as reports emerged stating the EU is considering disciplinary action over the Italian government’s failure to rein in debt.

Italy’s Deputy Prime Minister Matteo Salvini has said Rome could be targeted with a 3 billion euro ($3.3 billion) fine for accumulating debt and a deficit that breaks the bloc’s rules.

A European official told CNBC he could not confirm whether Italy would be slapped with a hefty fine, but said the EU executive had “some concerns” about the country’s fiscal trajectory.

· Stocks in Asia were mixed in Wednesday morning trade following a overnight session on Wall Street that saw the Dow Jones Industrial Average dropping more than 200 points.

The Nikkei 225 in Japan slipped 0.34% in early trade, as shares of index heavyweights Fast Retailing and Softbank Group declined. The Topix index also fell 0.44%.

In Australia, the ASX 200 shed 0.6% as almost all the sectors traded lower.

South Korea’s Kospi bucked the overall trend as it rose 0.72%, with shares of industry heavyweight Samsung Electronics and chipmaker SK Hynix gaining more than 1% each.

Reference: CNBC