Markets fell broadly in Europe after an attempt by populist parties to form a government in Italy failed.
Investors dumped Italian stocks and bonds as a result.
US crude futures CLc1 fell 0.3 percent to $68 a barrel after gaining 2.2 percent on Wednesday when Russia's central bank expressed caution on plans to boost oil supply.Prices had fallen to a six-week low of $65.80 a barrel on Tuesday amid concerns that Saudi Arabia and Russian Federation might increase their output.
"It comes as no surprise that we are seeing Italian markets suffer heavily, with the FTSE MIB hitting a 10-month low, and the two-year (Italian) bond yield topping two percent for the first time since 2013".
On the commodities front, U.S. West Texas Intermediate crude futures slipped 0.12 percent to trade at $66.65 per barrel after settling 1.7 percent lower on Tuesday. It dropped 1.7 percent to $66.73 a barrel in NY.More news: Jimmy Fallon Surprises Parkland Students With Graduation Speech
Emerging market stocks lost 1.0 per cent, marking a new low point for the year, under continued pressure from a rising U.S. dollar for countries that often borrow in that currency.
The Dow Jones index jumped 306 points, or 1.3 per cent to 24,668 - a strong gain, but not quite enough to erase yesterday's sell-off.
Stocks in Milan .FTMIB slid 2.7 percent in their fifth straight day of losses.
The Canadian dollar rose as much as 1.2% on Wednesday after the country's central bank held interest rates steady but suggested that it could raise rates soon, possibly as early as July.
Automakers report May U.S. sales the same day. The dollar was up 0.8% against the yen to ¥109.62. But the risk-off trade also benefited the yen, with the dollar dropping about 0.6 per cent today to a five-week low of 108.41 against the Japanese currency.
Investors shifted their money into the safety of USA government bonds. At the beginning of May the yield was just 1.78 percent. Sydney gave up 0.5 percent, Singapore dived 1.7 percent and Seoul was 1.6 percent lower.More news: Janet Jackson calls police to check on son amid nasty custody battle
Spain's Ibex was down 2.2% ahead of a likely confidence vote on prime minister Mariano Rajoy on Friday.
After years of pushing for inflation to return to just under 2 percent, it could not have come at a more hard time.
Oil prices meanwhile struggled as expectations grew that Saudi Arabia and Russian Federation would pump more oil to counter potential supply shortfalls from Venezuela and Iran, even as US output has surged in recent years. The pan-European FTSEurofirst 300 index .FTEU3 lost 1.3 percent.
Oil struggled under pressure from expectations that Saudi Arabia and Russian Federation would pump more oil to counter potential supply shortfalls from Venezuela and Iran, even as United States output has surged in recent years.
Gold fell 0.4 percent to $1,299 an ounce. The pound seems to have shrugged off the news and traded up 0.3% against the dollar.
Hong Kong's Hang Seng rose over 1 per cent too and MSCI's broadest index of Asia-Pacific shares outside Japan made 0.8 per cent as it clambered off near two-month lows.More news: Clinton Defends His Handling Of Lewinsky Scandal