Wall Street's main indices tumbled at the start of trading Wednesday as fears of heightened trade tensions with China hit tech stocks.

The increasing prospect of a US rate reduction also weighed on the dollar, helping push gold, a haven investment that is priced in the currency, to another record peak.

The tech-heavy Nasdaq fell by 1.7 percent at the opening bell, and the broad S&P 500 dropped 1.0 percent as investors worried about a renewed trade tensions with China.

"A Bloomberg report that the Biden Administration is discussing tighter export restrictions for semiconductors and semiconductor equipment going to China has caused an upsetting stir," said market analyst Patrick O'Hare at Briefing.com.

Shares in artificial intelligence chipmaker Nvidia fell 4.0 percent, while those in ASML, which manufactures the equipment to make computer chips, tumbled 9.7 percent.

"Separately, a remark from former President Trump that Taiwan should be paying the U.S. for its defense has created some geopolitical angst that is also weighing on the semiconductor group," O'Hare added.

Tech stocks, in particular Nvidia, have been on a tear in recent months over the boom in the development of artificial intelligence applications, helping drive Wall Street to new records.

The Dow and S&P 500 ended at fresh records on Tuesday.

In Europe, London equities held steady despite stronger-than-expected UK inflation data dousing hopes of a British interest rate cut any time soon.

The increasing prospect of a US rate reduction also weighed on the dollar, helping push gold to another record peak.

UK inflation holding steady at 2.0 percent in June from May, stronger than forecast, helped push the British pound close to a one-year high above $1.30 as investors also bet that the Federal Reserve was set to start reducing American borrowing costs soon.

Gold prices spiked to $2,482.42 per ounce, while the yen also rallied.

In Asia, stock markets saw mixed fortunes as expectations for a US rate cut played out against the prospect of another Donald Trump presidency, which analysts warn could see inflation-fuelling tax cuts and import tariffs.

- Key figures around 1330 GMT -

  • New York - Dow: DOWN 0.2 percent at 40,893.66 points
  • New York - S&P 500: DOWN 1.0 percent at 5,608.90
  • New York - Nasdaq Composite: DOWN 1.7 percent at 18,195.01
  • London - FTSE 100: UP 0.1 percent at 8,173.56
  • Paris - CAC 40: DOWN 0.4 percent at 7,551.46
  • Frankfurt - DAX: DOWN 0.4 percent at 18,437.63
  • EURO STOXX 50: DOWN 1.1 percent at 4,891.64
  • Tokyo - Nikkei 225: DOWN 0.4 percent at 41,097.69 (close)
  • Hong Kong - Hang Seng Index: UP 0.1 percent at 17,739.41 (close)
  • Shanghai - Composite: DOWN 0.5 percent at 2,962.85 (close)
  • Pound/dollar: UP at $1.3026 from $1.2974 on Tuesday
  • Euro/dollar: UP at $1.0940 from $1.0903
  • Dollar/yen: DOWN at 156.56 yen from 158.39 yen
  • Euro/pound: DOWN at 83.98 pence at 84.01 pence
  • West Texas Intermediate: UP 1.5 percent at $81.98 per barrel
  • Brent North Sea Crude: UP 1.1 percent at $84.66 per barrel