The pan-European Stoxx 600 index closed just over 1% down at the end of the trading day, having fluctuated since the open. Autos added 1.3% while utilities fell 1.27%.

Dr. Martens shares soared 20% after the British footwear brand projected higher annual revenue growth, having hiked prices to offset soaring inflation and reported strong sales for the fiscal year ended March 31.

DWS shares fell 6.2% after its CEO resigned just a day after German prosecutors raided the headquarters of the German asset manager and majority owner Deutsche Bank over “greenwashing” allegations.

The European blue chip index closed the month of May down 0.85%, as concerns about inflation resurfaced following red hot consumer price prints from across the euro zone.

Euro zone inflation hit an annual 8.1% in May, exceeding expectations and marking a seventh consecutive record high. Investors are closely watching the European Central Bank for hints at the pace and scale of interest rate hikes required to rein in consumer prices.

Will Hobbs, chief investment officer at Barclays Wealth & Investments, told CNBC on Wednesday that the outlook for inflation remains hugely unclear, making life difficult for investors.

“If you look at one year out professional forecasters’ inflation expectations, the dispersion, the range from top to bottom is as wide as we have seen since the early 80s,” he said.

Fresh data on Wednesday included May’s manufacturing PMI (purchasing managers’ index) readings from the euro zone and the U.K.

Europe’s monthly expansion fell to 54.6 in May from 55.5 in April, its lowest activity growth reading since November 2020.

British manufacturing activity grew at its slowest rate since January 2021, falling to 54.6 from 55.8 in April as the country’s cost-of-living crisis began to bite consumer goods producers.

Shares in Asia-Pacific were mixed on Wednesday as a private survey showed Chinese manufacturing activity contracted in May, though at a slower pace than in the previous month, as the country’s Covid-19 lockdowns continued to disrupt supply chains and soften demand.

U.S. stock futures were mostly higher in early premarket trade on Wednesday, after another choppy session on Wall Street.

The Federal Reserve has already given a strong indication of its rate hike intentions at its next two policy meetings in mid-June and late July, meaning U.S. stocks could struggle for direction over the summer.