On the energy front, Brent crude, the international benchmark, briefly hit the $85 mark before steadying around $83. It is currently up 7%, after already jumping 6% on Monday. US WTI also climbed 9%, nearing $78 a barrel, after a 6% gain the day before.

A commander of Iran's Revolutionary Guard said that the Strait of Hormuz, a strategic passageway and a vital artery for global crude trade, had been closed and that Iran would set fire to ships attempting to pass through it, according to Iranian media.

The surge in energy prices also pushed Treasury yields higher, as markets feared a renewed bout of inflation at the very moment US investors are betting on further Federal Reserve rate cuts to support the economy.

After leading the previous day's gains, technology stocks retreated sharply on Tuesday, including a 3% drop in Nvidia and a 3.2% fall in Broadcom, whose earnings release is due after the close on Wednesday. Other hard-hit names included memory-chip companies, posting steep declines in moves mirroring those seen amongst South Korean players: Micron sank 8%, Western Digital slipped 6.6% and Seagate gave up 6.5%.

Elsewhere, Blackstone shares fell 7% after a Financial Times report said its private credit fund recorded $1.7bn in net outflows in Q1.