Europe stocks traded sharpy lower on Wednesday after data showing the Continent’s largest economy contracted and eurozone industrial production declined.

Down three of the last four sessions, the Stoxx Europe 600 SXXP, -0.09% tumbled 1.68% to 366.15, with banks SX7E, -1.68% including UniCredit UCG, -2.30% and Danske Bank DANSKE, -2.35% lower.

The U.K. FTSE 100 UKX, +0.34% skidded 1.42% to 7147.88, the German DAX DAX, -1.09% tumbled 2.34% to 11482.66 and the French CAC 40 PX1, -0.69% tumbled 2.22% to 5243.84.

U.S. stocks DJIA, +1.33% were hammered at the open, as the 2- and 10-year Treasurys briefly inverted, which historically has been a predictor of U.S. recessions.

What’s moving markets

The state of the global economy returned to focus a day after relief from the U.S. government delaying tariffs on Chinese consumer products.

Germany’s economy shrank by 0.1% in the second quarter, according to data released by Destatis, the statistics agency.

“The external backdrop is set to remain challenging due to persistent weakness in global demand amid re-escalated U.S.-China trade tensions and the increased likelihood of a no-deal Brexit,” said Iaroslav Shelepko, an economist at Barclays. “Given varied risks, a gloomy global trade outlook and elevated uncertainty, we expect the economy to post another mild decline in the third quarter and therefore enter a technical recession even before Brexit and U.S.-E.U. trade risks are due to crystallize.”

The economy in the eurozone as a whole rose 0.2%, Eurostat reported, with Spain’s economy rising 0.5%, France’s economy improving by 0.2% and Italy’s economy staying flat.

Perhaps more concerning to markets was the 1.6% downturn in eurozone industrial production in June, as well as the softest Chinese industrial production growth in 17 years.

Focus stocks

Schindler Holding SCHP, -0.55% fell 7.2% as the elevator maker said markets may “slightly weaken over the remainder of the year” alongside a 2.8% decline in first-half operating profit. Its guidance for an annual net profit between 900 million and 940 million francs compares to consensus around 970 million francs. Rival ThyssenKrupp TKA, -4.53% fell 4.5%.

Admiral Group ADM, -1.79% shares advanced 4.1% as the British insurer reported a 4% rise in first-half pretax profit and an increase in its dividend.

Sports Direct UK:SPD tumbled 10% after announcing that its auditor, Grant Thornton, will step down on Sept. 11, when the troubled sporting-goods retailer holds its annual shareholder meeting. The Financial Times reported the retailer is in discussions with the U.K. government over its auditor difficulties, since no other accountant has so far been willing to step in.