European stocks fell amid uncertainty over the Federal Reserve's next move and renewed concerns about overvalued tech stocks following Palantir Technologies Inc.'s earnings report.

The Stoxx Europe 600 index closed 0.3% lower in London, paring an earlier intraday loss of 1.7%. Mining stocks were the biggest drag, while Telefonica SA pressured the broader telecom sector.

Switzerland's SMI index rose 0.6%, with food & beverage and healthcare stocks outperforming. Novartis and Roche Holding were among the top gainers on Tuesday.

The decline in European equities mirrored global market trends, as Palantir's AI-driven earnings failed to impress, and Wall Street executives warned of a potential market correction due to excessive valuations.

Karen Georges, a fund manager at Ecofi Investissements, noted, "The market is clearly in a profit-taking phase without substantial catalysts driving this pullback. With limited market-moving news, a consolidation is reasonable at this stage."