European markets declined on Thursday morning in London, pulling back after anxiety shook Wall Street about the potential tapering of bond purchases.
The FTSE (^FTSE) was down 2.1% by 9.40am, Germany's DAX (^GDAXI) was down 1.7% and the CAC (^FCHI) was almost 2.8% lower.
Over the last week, economic data from the US, Europe and China has all suggested that the rate at which major economies have been recovering in recent months is slowing.
Alongside this, research was released on Wednesday which suggested that people who become infected with the Delta variant of COVID even after being fully vaccinated may still pass the virus on.
The research showed levels of the virus could be just as high in people who get COVID despite having both jabs as in those who haven't been vaccinated. The study strengthens the case for booster jabs. US has already announced it will start administering them.
US stock futures followed Asia lower, with the S&P 500 (ES=F) looking set for an open 0.9% lower, Dow futures (YM=F) down 1% and Nasdaq futures (NQ=F) declining 0.9%.
The slide came following the release of Federal Reserve meeting notes, which showed officials agreed on slowing the pace of bond purchases later this year. Markets have been on edge about the prospect of tapering for weeks now.
US stocks had finished Wednesday's session around 1% down across the board.
"The Fed's ultra-easy monetary policy, which has been in effect since 2020, has provided support to financial markets by driving down bond yields," said Naeem Aslam, chief market analyst at AvaTrade.
"Because of lower returns on these bonds, investors have shifted to riskier assets such as equities, which typically provide higher returns. The shift toward a tighter monetary policy, on the other hand, indicates that the central bank is unlikely to provide the same level of liquidity to investors in near future."