Dow jones fell 258 points, pan-European STOXX 600 lost 0.21 pct

The dollar index rose 0.44 per cent, with the euro down 0.68 per cent to $1.1391.

Stock markets around the world edged lower on Wednesday while U.S. Treasuries prices rose as investors favoured safer investments amid a range of uncertainties, while the U.S. dollar surged and oil prices steadied after the previous day's session.

Investors have been unnerved by a range of issues in recent days, including some disappointing earnings reports, worries about global growth, a spat between Italy and the European Union over Italy's budget, uncertainty over Brexit and criticism of oil power Saudi Arabia over the killing of a journalist.

"There's too much uncertainty out there," said Michael O'Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut, adding worried about U.S. interest rate hikes to the list. "The market loves to climb a wall of worry but this keeps getting bigger."

The U.S. dollar climbed nearly one per cent against the euro to its strongest level since August on signs economic growth could be flagging across the eurozone.

The European Commission rejected Italy's draft 2019 budget saying it broke EU rules on public spending and asked Rome to submit a new one within three weeks or face disciplinary action.

The Dow Jones Industrial Average fell 258.81 points, or 1.03 percent, to 24,932.62, the S&P 500 lost 33.48 points, or 1.22 percent, to 2,707.21 and the Nasdaq Composite dropped 124.36 points, or 1.67 percent, to 7,313.18.

The pan-European STOXX 600 index lost 0.21 percent, failing to maintain gains from earlier in the session.

MSCI's gauge of stock markets across the globe shed 0.96 per cent. On Tuesday, the index closed more than 11 per cent below its January record close.

Treasury prices rose as investors were wary of volatile equities, though Treasury yields on Wednesday were above the three-week lows touched during Tuesday's session.

Justin Lederer, an interest rate strategist at Cantor Fitzgerald in New York said: "the market's trying to find a short-term range as everyone evaluates different global events going forward."

Economic growth worries were highlighted by the International Monetary Fund, which recently cut forecasts, citing trade wars and capital flight from emerging markets. The latest European PMI surveys underscored that view, showing German private-sector growth at the slowest in three years.

Oil rose towards $77 a barrel after hitting a two-month low as a strong drawdown in U.S. gasoline and diesel inventories augured for a coming seasonal rebound in refining demand.

U.S. crude rose 0.9 percent to $67.03 per barrel and Brent was last at $76.65, up 0.27 per cent on the day.

Saudi Arabia is in the midst of a diplomatic storm over the death of dissident journalist Jamal Khashoggi during a visit to the Saudi consulate in Istanbul.

In currencies, the euro fell 0.6 per cent against the dollar to its lowest since August, on PMI data showing business growth in the euro zone decelerated faster than expected due to waning orders.

The dollar index rose 0.44 per cent, with the euro down 0.68 per cent to $1.1391.

The Japanese yen strengthened 0.03 per cent versus the greenback at 112.43 per dollar, while sterling was last trading at $1.2903, down 0.61 percent on the day.

British Prime Minister Theresa May was to meet with Conservative Party lawmakers, some of whom have discussed toppling her amid ongoing Brexit negotiations.

U.S. gold futures fell 0.32 per cent to $1,232.80 an ounce as the dollar firmed and speculators locked in profit from a more than three-month peak hit in the previous session.