The pan-European STOXX 600 dropped 1.1% to 565.4 points by 0809 GMT, its lowest since November 7. Major regional bourses such as Germany and France were also down over 1.2% each.
European banking stocks were the biggest drags on the index, down over 2% each.
Investor sentiment globally has been fragile, with expectations high for Nvidia to deliver standout results on Wednesday at a time when worries of an AI bubble have intensified.
In Europe, AI equipment makers including Siemens Energy lost 3% and Schneider Electric fell 2%, while ABB’s shares dropped 4% after the company reaffirmed its top-line growth forecasts, disappointing investors.
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Traders are also cautious ahead of the long-delayed U.S. jobs report due on Thursday.While private surveys have pointed to a softening labour market, hawkish remarks from most Fed policymakers have dampened expectations of an interest rate cut in December.In a bright spot, Swiss drugmaker Roche Holding surged nearly 6% after reporting late stage trial results for its breast cancer pill giredestrant.
(Reporting by Anastasiia Kozlova in Gdansk and Johann M Cherian in Bengaluru; Editing by Mrigank Dhaniwala)