European stock markets closed lower on Tuesday, after struggling for direction for much of the session even as US stocks hit new record-highs.

Equity markets across Europe opened down over half a percent on Tuesday morning, with heavy industry and energy stocks dragging indexes lower. Mining and metals giant BHP (BHP.L) fell 1.8% in London after cutting its dividend.

Markets across Europe had turned positive by mid-morning, however, helped by rebounding airline stocks. But momentum faded as the session wore on.

The FTSE 100 (^FTSE) ended the day down 0.9%, while the DAX (^GDAXI) lost 0.4%, and France’s CAC 40 (^FCHI) fell 0.8%. Spain’s IBEX 35 (^IBEX) closed down 0.8% and the FTSE MIB (FTSEMIB.MI) dropped 0.6% in Milan.

“The dollar, and the global markets, appears to be struggling in the face of the latest US-China spat, i.e. the most recent round of restrictions placed on Huawei,” said Connor Campbell, a financial analyst at trading platform SpreadEx.

The US on Monday night expanded sanctions on China’s Huawei. The US Commerce Department added 38 Huawei affiliates to its economic blacklist. They included Huawei subsidiaries in European countries like France, Russia, Germany, and the UK.

“There also the issue of the Congress COVID-19 fiscal relief plan – or, rather, the lack of one,” Campbell said.

The disappointing session in Europe came despite a higher open for Wall Street. The S&P 500 (^GSPC) rose 0.3% in early trade to mark a new all-time high of 3,395, eclipsing the previous record set in February.

The S&P 500 was still up 0.1% by the time Europe closed, while the Nasdaq (^IXIC) was 0.4% higher. The Dow Jones (^DJI) had dipped by 0.1%.

“Equity indices in the US are still either printing new all-time highs in the case of the Nasdaq, or hovering just below their old highs,” said Fawad Razaqzada, a market analyst at ThinkMarkets.

“Stocks have been continually pushing higher since March not only because of optimism over a sharp economic recovery and hopes there will be an effective vaccine soon, but more to the point due to expectations that the Fed will maintain its expansionary monetary policy stance for a long period of time. Admittedly, the US stock markets do look overbought.”

Action in Asian stock markets was mixed overnight. Japan’s Nikkei (^N255) closed down 0.2% and the Hong Kong Hang Seng Index (^HSI) fell 0.2%, but China’s Shanghai Composite (000001.SS) rose 0.3% and the Shenzen Component (399001.SZ) gained 0.1%. In Australia, the ASX 200 (^AXJO) rose 0.7%.

In London, house builder Persimmon (PSN.L) ended the day up over 8% to top the FTSE 100 after confirming its business was rebounding strongly from the COVID-19 lockdown. Rival house builders Barratt Developments (BDEV.L) and Berkeley Group (BKG.L) rallied in sympathy.

Listen to the latest podcast from Yahoo Finance UK