European stocks sink amid trade concerns, emerging market turbulence

On Wall Street, equities were little changed as tech stocks tried to recover from a steep sell-off in the previous session. C-level executives from social media giants Twitter and Facebook testified before Congress on Wednesday, with shares of both falling on the back of regulatory concerns.

Traders also kept a close eye on the latest global trade developments, worried that the U.S. and China could slump further toward an all-out trade war. Washington could impose yet another round of tariffs on Beijing, targeting an additional $200 billion worth of Chinese goods, as a public comment period on the matter comes to an end Thursday.

Overall, investors are questioning the future of certain emerging markets, including Argentina. Officials in Buenos Aires said Wednesday that they are confident about a new deal with the International Monetary Fund (IMF). The country shocked market players last week after it asked the IMF for the early unlocking of funds from a $50 billion financing deal, adding to worries over whether it will meet its debt obligations.

The MSCI emerging markets index, which tracks the markets of 24 countries, fell 1.77 percent.

Back in Europe, Brexit remains a concern, following comments from the German government that it is ready for all scenarios, including a no-deal. Sterling briefly skyrocketed in the previous session following a report that the U.K. and Germany dropped key Brexit demands, lifting the prospect a deal being reached in Brussels. Meanwhile, the FT has reported that the U.K. will test a new scheme to hire non-EU agricultural workers to ensure that British farmers will not face problems after Brexit.

On the data front, markets digested news from the Swedish central bank. The Riksbank kept rates unchanged but said that the repo rate could go up in December or February.