Simmering trade and political tensions and a pumped-up dollar weighed on world shares on Thursday, while oil prices were under pressure before an Opec meeting expected to increase the world's supply of crude.
Europe's main stock markets were back near two-month lows and Wall Street futures had also turned lower, as the jitters that have dominated markets for months began to reassert themselves.
Europe's car shares fell to a nine-month lows after Mercedes-Benz maker Daimler warned the global trade tensions were slowing its sales. Italian stocks and bonds also tumbled on reports a eurosceptic had been given a key finance role.
Asia had been mixed, too, with Japan's Nikkei adding 0.6 percent and Australia's main index enjoying another strong day before the end of its financial year next week.
China remained the weak link, though, finished more than 1 percent lower, and ensured MSCI's broadest index of Asia-Pacific shares fell, dropping as much as 0.5 percent higher at one point.
Strains were compounded by the dollar's surge to an 11-month high. That raises inflation outside the US and puts pressure on any country or company that has gorged itself on dollar-denominated debt.
“The reaction of the dollar has been very interesting this week,” said State Street Global Markets head of macro strategy Michael Metcalfe.
“In previous periods this year, fears of a trade war have been dollar-negative, but that has been different this week ... we have had this potential escalation in the trade war, and it has rallied.”
The mere absence of new threats from US President Donald Trump on tariffs was nevertheless enough to keep hopes alive that all the bluster was a ploy which would stop short of an outright trade war.
Markets had also been encouraged by the People's Bank of China's move to set firm fixings for its yuan, along with the addition of extra liquidity, though the spot yuan rate did hit a fresh five-month low.
There was also much speculation the central bank would cut bank reserve requirements, thus boosting lending power in the economy.