Stock markets fell Tuesday as investors worried that headwinds are gathering for the US economy, outweighing hopes that recent weak data would prompt the Federal Reserve to start cutting interest rates.

The uncertainty also pushed down oil prices and global energy firms, as the prospect of slackening demand worldwide came just as the OPEC+ alliance said it would roll back production cuts to support prices starting in October.

Investors have shifted nervously in recent weeks on concerns the Fed will not cut interest rates until 2025 as inflation remains stubbornly above target and decision-makers warned against moving too early, insisting on seeing more evidence that price rises are under control.

The Institute for Supply Management (ISM) released its manufacturing index on Monday, showing US activity contracted for a second successive month in May.

The figures indicated that businesses were struggling with elevated interest rates and weak consumer spending, among other things.

"The manufacturing ISM data reaffirmed several prevailing economic trends: decelerating inflation, slowing growth, and a tight labour market," said Gary Pzegeo of CIBC Private Wealth US.

"We should see higher odds of a rate cut later this year priced into interest rate futures."

While traders have of late taken soft economic data as a positive sign, owing to the fact it gives the Fed room to cut rates, the latest news stoked concerns about the outlook for the economy.

BMO Capital Markets' Ian Lyngen and Vail Hartman said "investors are on guard for indications that the downside trajectory is accelerating".

Traders are awaiting Friday's release of US non-farm payroll figures for a fresh snapshot of the labour market in the world's biggest economy.

The selling pressure on Wall Street carried over into Asian and European trading, and US indexes fell further on Tuesday.

In Asia, Indian stocks tumbled as it appeared India's Prime Minister Narendra Modi would not win as big an election victory as expected.

Mumbai tumbled more than seven percent at one point as Modi's Bharatiya Janata Party looked set to win India's national elections but not with the landslide initially expected.

The Sensex had jumped more than three percent Monday on hopes a big majority would help Modi push through economy-boosting measures.

 Key figures around 1345 GMT 

 New York - Dow Jones: DOWN 0.2 at 38,499.72 points

New York - S&P 500: DOWN 0.3 percent at 5,270.45

New York - Nasdaq: DOWN 0.2 percent at 16,790.87

London - FTSE 100: DOWN 0.3 percent at 8,235.29

Paris - CAC 40: DOWN 0.4 percent at 7,968.07

Frankfurt - DAX: DOWN 0.7 percent at 18,488.00

EURO STOXX 50: DOWN 0.5 percent at 4,980.85

Tokyo - Nikkei 225: DOWN 0.2 percent at 38,837.46 (close)

Hong Kong - Hang Seng Index: UP 0.2 percent at 18,444.11 (close)

Shanghai - Composite: UP 0.4 percent at 3,091.20 (close)

Euro/dollar: DOWN at $1.0871 from $1.0903

Euro/pound: DOWN at 85.09 pence from 85.14 pence

Pound/dollar: DOWN at $1.2774 from $1.2802

Dollar/yen: DOWN at 154.90 yen from 156.21 yen on Monday

West Texas Intermediate: DOWN 1.5 percent at $73.09 per barrel

Brent North Sea Crude: DOWN 1.5 percent at $77.22 per barrel