Source: Sharecast
The pan-regional Stoxx 600 was down 0.7% to 554 at 0805 BST. France's CAC-40 fell 1.7%.
Trump’s announcement that he had sacked Lisa Cook over mortgage fraud allegations hit Asia markets and also drove US futures into the red. Cook on Monday said the president did not have the authority to remove her and that she would not resign.
"The mortgage fraud allegations are unlikely to be the real reason Cook is in the firing line. She has been outspoken about the inflationary impact of tariffs, warning last June that “Trump-style tariffs” would complicate the Fed’s job by pushing up prices and forcing policymakers to keep interest rates higher for longer," said Swissquote Bank analyst Ipek Ozkardeskaya.
"That is precisely the message Trump does not want to hear. Cook said she will not step down, but this latest episode of American political drama reignites concerns about the independence of the Fed, and by extension undermines confidence in the US as the global benchmark for transparent and rules-based capital markets."
The Fed has been in Trump's sights for months as he demands the bank cut interest rates, despite fears his global tariff war will trigger inflation. Fed Chair Jerome Powell has been a constant target.
France faces more political turmoil after the country’s three main opposition parties said they would not back a confidence vote called by Prime Minister Francois Bayrou for September 8 over his budget plans.
The news hit French financial stocks, with AXA, BNP Paribas and Credit Agricole all down.
Reporting by Frank Prenesti for Sharecast.com