European stocks fell on Tuesday pressured by losses in French shares amid escalating political uncertainty in the country, while growing concerns over the independence of the US Federal Reserve led to reduced appetite for higher-risk assets globally. The French CAC 40 index dropped 1.4%, and the country’s bonds suffered losses as it became increasingly likely that the minority government will be ousted next month. Three major opposition parties announced they would not support a confidence vote planned by Prime Minister François Bayrou on September 8 regarding his broad budget cuts. Shares of French banks BNP Paribas and Société Générale plunged 6.2% and 5.2% respectively. The broader European STOXX 600 index fell 0.7% with all major regional exchanges declining.

On Monday, US President Donald Trump took the unprecedented step of dismissing Federal Reserve member Lisa Cook over allegations related to two mortgage loans, fueling fears about the central bank’s independence and triggering a wave of sell-offs in US assets. Later, Cook issued a statement via a law firm denying Trump’s legal grounds and authority to remove her. Meanwhile, British American Tobacco shares dropped 1.8% after the company announced that its CFO, Thouraya Benchikh, would step down immediately after about 15 months in the role.