European stocks closed lower on Wednesday, as strength in the euro and a drop in commodity shares drew the regional benchmark near a two-month low. Equities in Europe fell alongside a slide for U.S. stocks, pulled lower in part by jitters over the prospects of success for the U.S. tax overhaul in Washington.

U.S. stocks closed lower Wednesday, with both the Dow and the S&P 500 suffering their biggest one-day percentage drops since September as falling oil prices and worries over the progress of a U.S. tax overhaul left investors increasingly averse to putting more money into assets seen as risky.

Global stock markets stabilized somewhat in Asia on Thursday, following broad weakness since the end of last week, with shares in Japan gaining after six straight sessions in the red. The Nikkei Stock Average NIK, +1.23% was up 0.8%, recovering from Wednesday's 1.6% decline, though the index was still off 3.5% since closing at a 25-year high on Tuesday last week.