In Asia, Tokyo’s Nikkei 225 fell 3.1%, while Hong Kong’s Hang Seng slipped 2%. The Shanghai Composite was 0.4% higher. The FTSE 100 in London dropped 2.6%, as the CAC 40 in Paris declined 2.2% and Frankfurt’s DAX dipped 2.4%.

Every constituent of the three major stock market indexes in London, Paris, and Frankfurt was in the red in early trading, with the pan-European Stoxx 600 slipping 2.3% down from fresh highs reached on Monday. Stocks in Asia—particularly Asian tech stocks—also took cues from Wall Street to move lower.

“Once again it has been concern about inflation that appears to be weighing on broader market sentiment, with commodity prices once again the major culprit, ahead of U.S. CPI numbers that are due out later this week,” said Michael Hewson, an analyst at CMC Markets.

Investors will be closely watching the headline U.S. inflation figure—the Consumer Price Index, or CPI—when it is released on Wednesday. Hewson expects to see “a big rise” in this key measure.

“Some days investors appear relaxed about inflation risks and the possibility of central banks having to lift rates and withdraw stimulus. Today is not one of those days,” said Russ Mould, an analyst at AJ Bell.  

“The valuations of the tech-based growth companies in the U.S. are harder to justify in an inflationary and rising interest rate environment—where lower risk assets typically offer higher returns—hence the big fall in the Nasdaq yesterday,” Mould added.

European and Asian technology stocks have been battered like their U.S. peers. Shares fell in Dutch semiconductor group ASML, German software giant SAP, Finnish telecom Nokia, British high-tech grocer and robotics logistics specialist Ocado, as well as Chinese internet giants Alibaba, Tencent and Baidu.

There was also particular weakness in companies exposed to commodity prices—especially miners and major oil companies. London-listed miners Rio Tinto, Glencore, Anglo American, BHP, Fresnillo, Antofagasta, and Polymetal International were all lower, alongside European-listed oil groups BP, Royal Dutch Shell, Total, and Eni.

Palantir Technologies  (ticker: PLTR) stock fell 10% after reporting a profit of 4 cents a share, in line with forecasts, on sales of $341 million, above expectations for $332 million.

Tyson Foods  (TSN) stock dropped 1.9% after getting downgraded to Neutral from Overweight at Piper Sandler.

BioNTech  (BNTX) stock dropped 4% after getting downgraded to Neutral from Buy at Bryan Garnier.

Nike  (NKE) stock gained 1% after getting upgraded to Buy from Hold at Jefferies.

Dow Inc.  (DOW) stock dropped 2% after getting downgraded to Neutral from Buy at Goldman Sachs.

Write to Jacob Sonenshine at jacob.sonenshine@barrons.com