European markets tumble as U.S. bond yields surge; Stoxx 600 down 1.5% - CNBC

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European stocks were sharply lower on Wednesday as U.S. Treasury yields spiked, with inflation concerns continuing to weigh on global markets.

The pan-European Stoxx 600 fell 1.5% in early trade, with travel and leisure stocks dropping 2.4% to lead losses as all sectors and major bourses slid into negative territory.

The benchmark U.S. 10-year Treasury yield surged back above 1.56%, briefly notching a three-and-a-half-month high as investor jitters over the potential for persistent higher inflation endured. The jump in bond yields has caused investors to flee highly valued tech stocks, as higher rates make their future profits less attractive.

The reversal of Tuesday's positive sentiment did not apply to Europe alone. U.S. stock futures fell in early premarket trading and shares in Asia-Pacific were mostly lower in Wednesday trade.

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In terms of individual share price movement in Europe, British grocery giant Tesco climbed 4.7% in early trade after upgrading its outlook following strong first-half results.

At the bottom of the European blue chip index, Danish medical device company Ambu tumbled more than 9% after warning that revenue growth and earnings will fall below previous guidance.

Data releases from Europe on Wednesday included the latest German industrial orders and most recent reading of Spain's industrial output.

Investors in the region could be keeping an eye on U.S. data on Wednesday for more indications on the country's economic health with the ADP private payrolls report for September set to be released Wednesday. The closely watched nonfarm payrolls report for September is slated for release on Friday.

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- CNBC's Hannah Miao and Eustance Huang contributed to this market report.

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European markets tumble as U.S. bond yields surge; Stoxx 600 down 1.5% - CNBC
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