European stock markets fell on Wednesday, knocked by Wall Street suffering its worst day of the year on Tuesday, as doubts around Donald Trump’s economic policies drove investors out of some of the most popular trades of the last few months.

The Dow Jones Industrial Average and the S&P 500 both fell more than 1 per cent on Tuesday, which marked their worst one-day performance since Mr Trump’s election victory in November, according to Reuters.

Asian shares posted their biggest single-day decline in two weeks on Wednesday and major indices across Europe faltered too.

London’s FTSE 100 ended the day off 0.7 per cent. The Stoxx Europe 600 index slipped 0.4 per cent. US indexes fell too, but not as dramatically as on Tuesday.

“Traders seem to be reassessing the Trump trade,” said Neil Wilson, an analyst at ETX Capital.

“Will he deliver on the promise that has fuelled the gains since November? It does appear that the optimism has gone to some extent,” he added.

Strategists at Morgan Stanley agreed that investors are “beginning to doubt the potential pace of US economic fiscal policy reform”.

The fall in equities also coincided with the release of an investor survey by Bank of America Merrill Lynch, which showed that investors now see global stocks as being at their most expensive in 17 years.

In the US, bank stocks were particularly hit by selling on Tuesday and the S&P’s sub-sector of financials fell around 2.9 per cent, which was its biggest fall in a single day since June last year.

In the aftermath of Mr Trump’s November election victory stock markets, especially in the US had surged, spurred by the New York businessman’s campaign promises of tax and regulatory roll backs and higher infrastructure spending.

The controversial orders Donald Trump has already issued Show all 9 1 /9 The controversial orders Donald Trump has already issued The controversial orders Donald Trump has already issued Trump and the media White House Press Secretary Sean Spicer takes questions during the daily press briefing Getty Images The controversial orders Donald Trump has already issued Trump and the Trans-Pacific Partnership Union leaders applaud US President Donald Trump for signing an executive order withdrawing the US from the Trans-Pacific Partnership negotiations during a meeting in the Roosevelt Room of the White House in Washington DC. Mr Trump issued a presidential memorandum in January announcing that the US would withdraw from the trade deal Getty The controversial orders Donald Trump has already issued Trump and the Mexico wall A US Border Patrol vehicle sits waiting for illegal immigrants at a fence opening near the US-Mexico border near McAllen, Texas. The number of incoming immigrants has surged ahead of the upcoming Presidential inauguration of Donald Trump, who has pledged to build a wall along the US-Mexico border. A signature campaign promise, Mr Trump outlined his intention to build a border wall on the US-Mexico border days after taking office Getty Images The controversial orders Donald Trump has already issued Trump and abortion US President Donald Trump signs an executive order as Chief of Staff Reince Priebus looks on in the Oval Office of the White House. Mr Trump reinstated a ban on American financial aide being granted to non-governmental organizations that provide abortion counseling, provide abortion referrals, or advocate for abortion access outside of the United States Getty Images The controversial orders Donald Trump has already issued Trump and the Dakota Access pipeline Opponents of the Keystone XL and Dakota Access pipelines hold a rally as they protest US President Donald Trump's executive orders advancing their construction, at Columbus Circle in New York. US President Donald Trump signed executive orders reviving the construction of two controversial oil pipelines, but said the projects would be subject to renegotiation Getty Images The controversial orders Donald Trump has already issued Trump and 'Obamacare' Nancy Pelosi who is the minority leader of the House of Representatives speaks beside House Democrats at an event to protect the Affordable Care Act in Los Angeles, California. US President Donald Trump's effort to make good on his campaign promise to repeal and replace the healthcare law failed when Republicans failed to get enough votes. Mr Trump has promised to revisit the matter Getty Images The controversial orders Donald Trump has already issued Donald Trump and 'sanctuary cities' US President Donald Trump signed an executive order in January threatening to pull funding for so-called "sanctuary cities" if they do not comply with federal immigration law AP The controversial orders Donald Trump has already issued Trump and the travel ban US President Donald Trump has attempted twice to restrict travel into the United States from several predominantly Muslim countries. The first attempt, in February, was met with swift opposition from protesters who flocked to airports around the country. That travel ban was later blocked by the Ninth Circuit Court of Appeals. The second ban was blocked by a federal judge a day before it was scheduled to be implemented in mid-March SANDY HUFFAKER/AFP/Getty Images The controversial orders Donald Trump has already issued Trump and climate change US President Donald Trump sought to dismantle several of his predecessor's actions on climate change in March. His order instructed the Environmental Protection Agency to reevaluate the Clean Power Plan, which would cap power plant emissions Shannon Stapleton/Reuters

Bank stocks enjoyed especially sharp rises and the dollar rallied hard too, but in the last few weeks moves have become more muted.