Source: Sharecast
The pan-regional Stoxx 600 index was down 0.63% to 543.24, with Germany's DAX down more than 1% and France's CAC-40 0.8% lower.
US stocks on Monday finished well below their highs for the day, though the S&P 500 and Nasdaq still managed to eke out new record highs, as the bull run continues ahead of a busy week for corporate earnings.
Meanwhile, investors are concerned that no real progress has been made on an EU-US trade deal ahead of an August 1 deadline for the imposition of a 30% tariff on goods imported from the 27-nation bloc.
"European markets are in the red today as traders increasingly gear up for a two-week period that will likely see risk of sentiment build as we approach the deadline," said Rostro analyst Joshua Mahony.
"Coming hot off the heels of record eyes in US indices, the justification for such pricing will increasingly come into question in the absence of any significant breakthrough in trade negotiations. For Europe, the insistence that the EU stands ready to retaliate with a €21bn billion package of counter measures will do little to improve sentiment."
"Whilst the economic data has largely been relatively upbeat over recent weeks, it is likely that the worst is yet to come if we see Trump’s tariffs surge at the end of the month. One positive implication of the tariff policies has been the income generated through the current import taxes, with the rise of the dollar and falling yields partly linked with the billions of fresh income levied towards paying off the debt."
In equity news, Norsk Hydro shares were up as the Norwegian renewable energy and aluminium company posted a 33% forecast-beating increase in core profit, driven by rising aluminium and energy prices.
Lender Julius Baer gained, despite missed first-half net profit estimates. Switzerland's Givaudan fell after missing half-year sales forecast due to a strong Swiss franc.
Sartorius Stedim Biotech slumped 12% as the French lab supplies maker reported half-year results.
Reporting by Frank Prenesti for Sharecast.com