(Reuters) – European shares eased in low volumes on Wednesday, pulled down by disappointment about U.S. Federal Reserve comments on interest rate cuts overnight as well as mixed signals from Washington on the Sino-U.S. trade dispute.

The pan-European STOXX 600 index fell 0.3% as it extended losses to a fourth day, on course to end a three week gaining streak fueled by expectations of more monetary stimulus globally and hopes of a revival in Sino-U.S. trade talks.

Real estate, healthcare and utilities led declines on Wednesday, while banks – which tend to benefit from higher interest rates – auto and energy stocks, outperformed.

Drugmakers Novartis and Roche fell 2% and 0.7% respectively, and weighed on Swiss shares which declined 0.6% amid a row over stock market equivalence between Switzerland and the European Union.

“It feels like there is a bit of a rotation in terms of what has been up in the run up to this weekend’s event has started to fade and vice and versa,” said Mark Taylor, sales trader at Mirabaud Securities in London.

The healthcare sector – a defensive play – gained around 5% over the last three weeks.

On the Sino-U.S. trade front, U.S. Treasury Secretary Steve Mnuchin said U.S. and China were 90% through in making headway in resolving the trade dispute. [MKTS/GLOB]

But President Trump later threatened to impose more tariffs on Chinese goods, ahead of a highly anticipated meeting between President’s Donald Trump and Xi Jinping over the weekend.

“It’s always been this last 10%….Now its a case of you’d rather see the actual event now that it’s a just few days away, than listen to a continued barrage of rhetoric,” Mirabaud’s Taylor said.

The trade comments came after the Fed quashed market hopes for a 50 basis point cut in its key borrowing rate next month late on Tuesday.

European markets saw their biggest sell-off in more than two years in May, hit by a cocktail of concerns over trade tensions, the global economic cycle and Brexit, and are on course to reverse those losses, but traders say the mood is shaky.

“We’re pleased that the macro has been stabilized thanks to central banks, but that doesn’t mean we are suddenly serene about putting our foot on the accelerator in equities,” said Guillaume Lasserre, chief investment officer at Lyxor Asset Management.

On the day, German shares outperformed, thanks to a near 7% jump in Thyssenkrupp spurred by a report of a possible offer from Kone for the company’s elevator business.

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