This is CNBC's live blog covering European markets.

European stock markets closed lower Tuesday, as a boost from Chinese stimulus measures faded.

The Stoxx 600 index ended 0.2% lower. Chemical stocks were down around 1.2%, as oil and gas climbed 1.2%.

It came after stock markets closed flat on Monday, losing momentum throughout the session after some of China's biggest banks cut interest rates on a range of deposits. Asia-Pacific stocks were lower on Tuesday as traders assessed weak Chinese services data, while U.S. markets slipped after Labor Day.

Danish drug maker Novo Nordisk closed 1% higher, after jumping 1.7% in mid-afternoon trade as it extended its lead as Europe's new most valuable firm. It powered past luxury goods giant LVMH at the Monday close after briefly taking the top spot last week, as it launched its weight loss drug Wegovy in the U.K.

Novo Nordisk closed with a market capitalization of around $428.3 billion, including unlisted shares, ahead of LVMH's $417.86 billon, according to LSEG data.

Euro zone consumer inflation expectations for three years from now nudged higher in July, the latest survey from the European Central Bank found, from 2.3% to 2.4%. One-year expectations were unchanged at 3.4%.

This will be unwelcome news for the ECB, which has hauled interest rates to 3.75% over a year of consecutive hikes in an effort to dampen long-term price expectations and pull inflation to its 2% target.

However, it must also contend with a deteriorating economic picture and warnings of increased recession risk in the third quarter. Euro zone final composite Purchasing Managers' Index figures for August also released Monday showed the steepest fall in output for 33 months, as the services industry joined manufacturing in contraction territory.

The ECB's next monetary policy meeting is Sept. 14 and money markets are currently pricing in a 25% probability of a maximum 25 basis point hike.

U.S. stocks open little changed after Labor Day holiday

U.S. stocks opened little changed to kick off a shortened week of trading.

The Dow Jones Industrial Average hovered near the flatline, while the S&P 500 slipped 0.1%. The Nasdaq Composite lost about 0.3%

— Samantha Subin

Stocks on the move: Sectra drops 16%, Commerzbank down 4%

Swedish medical technology company Sectra was heading for its worst day in four years on Tuesday, down 16.5% at 1:30 p.m. Stockholm time, according to Refinitiv data.

The company on Tuesday reported quarterly results that showed higher net sales and operating profit, but a lower operating margin and cash flow.

Germany's Commerzbank fell 3.7% after Barclays cut its rating on the stock to "underweight." The overall banking sector moved from early losses to a 0.34% gain.

French luxury group LVMH traded 0.8% lower after losing its spot as Europe's most valuable company to Novo Nordisk, which was 1.45% higher. Luxury stocks were broadly downbeat on the latest set of weak Chinese economic data.

— Jenni Reid

Euro zone producer prices fall — but consumer inflation expectations rise

Data released Tuesday painted a mixed picture of price pressures in the euro zone, as producer prices continued to fall but long-term consumer inflation expectations ticked higher.

Producer prices were down 7.6% year-on-year in July in the euro area, dropping for a seventh consecutive month, according to Eurostat.

However, inflation expectations for the three years ahead — a key gauge for the European Central Bank — rose from 2.3% in June to 2.4% in July.

— Jenni Reid

Euro zone PMIs revised down as recession risks mount

Euro zone business activity dropped at the steepest rate in nearly three years in August, according to final HCOB/S&P Global Purchasing Managers' Index figures released on Tuesday, as support from the services sector fell away.

The composite PMI output index was printed at 46.7, below a preliminary read of 47. A figure under 50 indicates a contraction.

Excluding the Covid-19 pandemic period, this was the most severe contraction since 2013.

The bloc's dominant services industry contracted for the first time this year, with the survey also finding a sharp fall in new orders and a "near-stalling" of jobs growth.

"The eurozone didn't slip into recession in the first part of the year, but the second half will present a greater challenge," said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.

"The once stabilizing services sector turned into a drag for the economy while manufacturing has not bottomed out yet, most probably," he said. The bank now forecasts the euro zone GDP will contract by 0.1% in the third quarter.

— Jenni Reid

UK retail sales resilient in August

U.K. retail sales were higher in August, figures from the British Retail Consortium showed on Tuesday, as consumer confidence improved.

Total retail sales were up by 4.1% in the four weeks to Aug. 26, ahead of the three-month average growth of 3.6% and compared to 1% growth in August 2022. The survey notes it does not adjust figures for inflation, meaning overall sales volumes may have been lower.

U.K. headline consumer price inflation was 6.8% in July.

"The sales figures reflected the improvement in consumer confidence in August, and retailers hope this general upwards trend will carry on," said Helen Dickinson, CEO of the British Retail Consortium.

"Easing inflation will certainly be welcomed by consumers, but as the rate of price rises falls, so will the extra spending needed by consumers. As a result, sales growth may fall in the coming months, even if volume growth does not."

— Jenni Reid

German companies' inflation expectations dip

German businesses reported slightly lower price expectations in August, according to a survey from the ifo institute.

Timo Wollmershäuser, head of forecasts at ifo, said there was only a slight change in high inflation expectations within the hospitality sector, the food and beverage industry and among retailers.

"In contrast, the price increase in manufacturing seems to have almost stopped," Wollmershäuser said on Tuesday, with a survey reading of 3.7 versus 33.5 in retail and 55.1 in food and beverage trade.

The survey found "opposing developments" in manufacturing, with automakers still planning to raise prices, while paper producers intend to cut them.

Consumer price inflation in Germany dipped slightly to 6.4% in August on an EU-harmonized basis, according to preliminary figures. July producer prices decreased for the first time in two-and-a-half years, falling by 6% year-on-year as energy prices plunged 19.3%.

— Jenni Reid

China service sector activity logs slowest expansion in eight months: Caixin survey

China's services sector recorded its slowest expansion since December 2022, according to a Caixin survey.

The Caixin purchasing managers index for August came in at 51.8, down from 54.1 in July.

The survey noted that this was amid a softer rise in overall new work, adding that "notably, new business from abroad fell for the first time in 2023 so far."

Nevertheless, companies remained optimistic onthe 12-month outlook, and planned company expansions supported a further increase in employment across the sector, the report said.

— Lim Hui Jie

CNBC Pro: UBS downgrades 2 large global automakers over 'highly competitive' Chinese EVs threat

UBS has downgraded two large global automakers over mounting competition from Chinese electric vehicle manufacturers.

The investment bank also cut price targets as it sees mass market car makers lose market share to Chinese firms such as Warren Buffett-backed BYD.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Country Garden pays bond coupon due in August, avoiding default: Reuters

Chinese property developer Country Garden Holdings wired bond coupon payments that were due last month, Reuters reported, citing a source close to the company.

China's largest private property developer failed to pay a $22.5 million coupon on two U.S. dollar bonds on Aug. 6, raising market fears of a default. Both payments had 30-day grace periods.

— Lim Hui Jie

UBS expects 'clear signs of slowing' for U.S. economy by November's FOMC meeting

UBS is sticking by its view of a "softish" landing for the U.S. economy, saying inflation is moving closer to the Federal Reserve's target without a recession this year.

"August was a tough month for investors," said Mark Haefele, global wealth management chief investment officer at UBS, noting that the S&P 500 ended last month down 1.6%. "Contradictory evidence and conflicting interpretations of economic data, asset pricing, and the outlook for Fed policy have buffeted asset prices in recent weeks as expectations of a soft landing for the US economy have ebbed and flowed."

Some remaining uncertainties could still keep market on edge, Haefele said in the Monday note. Last month's increase in core PCE came out well above the Fed's target, which could sustain the possibility of another rate hike, the analyst said. UBS is also watching for a potential rebound in savings rates and further cooling in the labor market.

"Our base case view is that by the November FOMC meeting, the economy will have shown clear signs of slowing, leading the Fed to finally put an end to its sharpest rate hike cycle since the 1980s. We expect US Treasury yields to fall by year-end as both US economic growth and inflation moderate," Haefele wrote.

— Pia Singh

CNBC Pro: Here’s where to invest $50,000 right now, according to the pros

Markets now look pretty different from just a few months ago when stocks were rallying.

If you had $50,000 to invest, where should you put it and how much should you allocate to each asset class? CNBC Pro spoke to portfolio managers and other investors to find out.

We also got back to those who told CNBC Pro how they would allocate $50,000 in June to ask what — if anything — they would change.

CNBC Pro subscribers can read more here.

— Weizhen Tan

European markets: Here are the opening calls

European markets are expected to open lower Tuesday.

The U.K.'s FTSE 100 index is expected to open 17 points lower at 7,433, Germany's DAX 27 points lower at 15,778, France's CAC 10 points lower at 7,263 and Italy's FTSE MIB down 95 points at 28,568, according to data from IG.

Data releases Tuesday include final purchasing manager's index (PMI) data, measuring business activity in the manufacturing and services sectors, from the euro zone and U.K. for August.

— Holly Ellyatt