US stocks fell sharply in late trading after comments by the Bank of England's chief about removing market support shook investor confidence. Treasury yields rose, and the dollar strengthened.

The S&P 500 fell amid renewed selling in technology stocks, sending the Nasdaq 100 down more than 1%. Long-end treasuries took the brunt of the losses, and the pound fell after BOE governor Andrew Bailey urged investors to finish winding up positions they couldn't keep, saying the central bank will halt market intervention at the end of this week as planned.

Risk sentiment remained fragile following a four-day losing streak that wiped $1.6 trillion off the value of the S&P 500 index ahead of US inflation data. In the absence of a major shortfall, Thursday's data could cement the case for another 75-basis-point interest-rate increase at the Federal Reserve meeting.

Officials have not indicated a desire to pause their rate-hiking cycle in the near future, with Cleveland Fed President Loretta Mester saying on Tuesday that officials must continue raising interest rates and cannot become complacent.

Pension funds in the UK felt that the Bank of England's intervention in the Gilt markets should be extended to the end of the month, but the Bank of England Governors' comments at the IIF event later in the session stated that they were sticking to the plan, ending QE on Friday. Off the back of this, the pound plummeted, and its effects rippled throughout the market in the final hour of trading.