Wall Street followed the negative sentiment for sovereign debt. In 3:05pm trading in New York, the Dow Jones Industrial Average dropped 0.6 per cent, while the Nasdaq Composite Index shed 0.8 per cent. In 2.50pm trading, the Standard & Poor's 500 Index retreated 0.8 per cent.
"More than anything you've had a fairly good-sized move up on the 10-year Treasury [yield] over a short period," Jim Paulsen, chief investment strategist at The Leuthold Group in Minneapolis, told Reuters.
"Investors are on a very short term reacting to where yields are at this moment compared with only a week ago."
The Dow moved lower as slides in shares of General Electric and those of Intel, recently 3.9 per cent and 1.8 per cent weaker respectively, outweighed gains in shares of Wal-Mart Stores and those of DuPont, recently up 0.6 per cent and 0.4 per cent respectively.
Meanwhile, a report US employers added fewer jobs than economists had expected did little to alter the view of a solid labour market, and bets for another Federal Reserve interest rate hike this year.
An ADP Research Institute report showed US private payrolls rose by 158,000 in June, following a revised 230,000 increase in May.
A survey of economists by Reuters had predicted a gain of 185,000 while a poll by Bloomberg had anticipated an increase of 188,000.
"The slowdown in hiring, in our view, is a function of the difficulty in hiring workers," John Ryding, chief economist at RDQ Economics in New York, told Reuters. "Companies remain very reluctant to lay off workers and this is a continued sign of the tightness of the labour market."
On Friday the government will publish its nonfarm payrolls data, which, according to a Reuters survey, likely increased by 179,000 last month after May's 138,000 gain. The unemployment rate is forecast unchanged at 4.3 per cent.
In Europe, the Stoxx 600 Index ended the day with a 0.7 per cent decline from the previous close. The UK's FTSE 100 Index slid 0.4 per cent, France's CAC40 Index decreased 0.5 per cent, while Germany's DAX Index fell 0.6 per cent.