United States stocks fell sharply and the dollar rose on Wednesday as investors awaited both the results of the US midterm elections and key data on consumer prices that could impact the Federal Reserve's policy on interest rates.
A deal for major cryptocurrency exchange FTX collapsed late in the session as bigger rival Binance said it was pulling out - news that heightened concerns about the sector's stability.
Stocks in Europe and on Wall Street fell as the outcome of the midterm elections remained unclear as a better-than-expected showing by Democrats muddied the outlook for fiscal spending and regulation.
"After a few days of positive market performance, the fact that there's some uncertainty about the midterm election outcome is resulting in declines today," State Street Global Advisors chief investment strategist Michael Arone said.
"Markets crave certainty. They don't have it yet."
Stock markets have tended to perform better under a split government.
Average annual S&P 500 returns have been 14 per cent in a split Congress and 13 per cent in a Republican-controlled Congress under a Democratic president, according to data since 1932 analysed by RBC Capital Markets.
That compares with 10 per cent when Democrats controlled both the presidency and Congress.
"The market is going to get what it wants. It's going to get divided government," said Ameriprise Financial chief market strategist Anthony Saglimbene said.
"It means gridlock is the agenda item for the next two years.
"It's not going to seriously alter spending but it's also going to block any material increases in spending."
On Wall Street, the Dow Jones Industrial Average fell 1.95 per cent, the S&P 500 slid 2.08 per cent and the Nasdaq Composite dropped 2.48 per cent.
MSCI's all-country world index shed 1.64 per cent and the pan-European STOXX 600 index fell 0.30 per cent.
Overnight in Asia, shares had edged up as the election results first rolled in.
Walt Disney Co tumbled 13.16 per cent, its biggest one-day decline in 21 years, after the entertainment heavyweight reported more losses from its push into streaming video, while Meta Platforms Inc gained 5.18 per cent after the Facebook parent said it would cut 13 per cent of its workforce.
Investors cheered Meta's decision to reduce spending but a weak advertising market for the company points to a difficult economic outlook as the Fed hikes rates to tame high inflation.
Data on the US consumer price index (CPI) is due on Thursday, with economists polled by Reuters forecasting a decline in both the monthly and yearly core numbers for October to 0.5 per cent and 6.5 per cent respectively.
Many in the market believe the US central bank can reduce its target lending rate if data shows inflation ebbing, but others see it moving "higher for longer" as Fed Chair Jerome Powell indicated last week.
"Clearly investors are hoping that the rate of inflation begins to roll over and if that does not happen, I do think that causes some additional volatility in markets," Arone said.
Federal fund futures show the Fed's target rate will peak at 5.096 per cent next June, indicating policymakers must hike rates by more than 125 basis points from their current 3.75 per cent to 4.0 per cent range.
Bitcoin, the biggest cryptocurrency by market value, fell 13.42 per cent to $US16,061.00 ($A24,976.48), lows last seen in November 2020.
The euro was lower, down 0.59% to $US1.0013 ($A1.5571), just off the $US1.0096 ($A1.5700) hit overnight, its highest level since Sept. 13.
The yen weakened 0.45% versus the dollar at 146.36, after weakening overnight to 145.17, its lowest level against the Japanese currency this month.
The yield on 10-year Treasury notes was down 3.1 basis points to 4.097 per cent.
Oil prices sank after industry data showed US crude stockpiles rose more than expected and on concerns a rebound in COVID-19 cases in top importer China would hurt fuel demand.
U.S. crude futures fell $US3.08 ($A4.79) to settle at $US85.83 ($A133.47) a barrel and Brent futures settled down $US2.71 ($A4.21) at $US92.65 ($A144.08).
Gold dipped as an uptick in the dollar nudged bullion prices off a more than one-month high.
US gold futures settled 0.1 per cent lower at $US1713.70 ($A2664.98).