European stocks are likely to open lower on Thursday after the United States House of Representatives passed two bills intended to support protesters in Hong Kong and send a warning to China about human rights.
The U.S. decision will have a significant impact on U.S.-China relations, as the more than 15-month-long trade war shows signs of spilling over into disputes over technology, finance and more.
China threatened "strong countermeasures" if U.S. lawmakers throw their support behind the protesters in Hong Kong.
Asian markets slipped into the red on renewed doubts over a near-term U.S.-China trade pact.
Safe-haven assets such as gold and the Japanese yen rose on safe-haven demand while oil prices fell after sharp gains in the previous session on data showing a smaller-than-expected build in U.S. inventories and rising tensions in the Middle East.
Public sector finance data from the U.K. is due later in the session, headlining a light day for the European economic news.
Across the Atlantic, news on the trade front may potentially overshadow reports on weekly jobless claims, existing home sales and Philadelphia-area manufacturing activity.
U.S. stocks closed lower overnight as China condemned a U.S. Senate resolution supporting human rights in Hong Kong and reports suggested that the U.S. and China remain divided over core issues and that completion of a "phase one" trade deal could slide into next year.
Traders also parsed the minutes of the October meeting of the Federal Reserve's interest-rate-setting committee, which suggested the bank will not likely change interest rates soon.
The Dow Jones Industrial Average and the S&P 500 shed around 0.4 percent while the tech-heavy Nasdaq Composite index declined half a percent.
European markets fell on Wednesday after U.S. President Donald Trump threatened that he would impose even higher tariffs on Chinese goods if a trade deal is not made between the two countries.
The pan European Stoxx 600 eased 0.4 percent. The German DAX dropped half a percent, France's CAC 40 index slid 0.3 percent and the U.K.'s FTSE 100 gave up 0.8 percent.