A look at the day ahead in European and global markets from Tom Westbrook

U.S. stocks finally caught up overnight with what currency and bond markets have been saying for several weeks: A slowdown is coming.

The Nasdaq's 4% fall .IXIC was its steepest in two-and-a-half years. Bond yields fell sharply and markets are now pricing in a roughly 50-50 probability of the Fed cutting rates in May.

Tesla shares have halved since their post-election peaks and the dollar, which had been rising in anticipation of Donald Trump's policies, has now begun sliding as he slaps tariffs on his neighbours.

The so-called "Trump trade" is in full retreat and the "Trump put", or the expectation that he may be sensitive to falls in the stock market, is so far nowhere to be seen.

Citi downgraded its U.S. asset allocation recommendation, cutting stocks to "neutral" from "overweight" after the market closed, saying that for the next few months at least it's not clear that the U.S. economy's outperformance can continue.

Asian markets did their best to steady the ship, helped a bit because it's everywhere outside the U.S. that stands to benefit from any repatriation flows from dumped U.S. assets.

Stocks in Tokyo .N225, Seoul .KS11, Hong Kong .HSI and Sydney .AXJO were off their early lows by the afternoon, but the mood was skittish. U.S. equity futures also fell in early trade and, while recovering their losses, are struggling to make much headway beyond flat. MKTS/GLOB

The scene in currency markets was quiet. The yen has been rising for weeks and inched to a new five-month peak in the Asia session - although, as some dealers noted, it's stocks catching up to the move in dollar/yen rather than the other way around.

The euro, too, has shown little reaction to Germany's Greens promising to block plans for increased military spending, perhaps in anticipation of a compromise deal.

Key developments that could influence markets on Tuesday:

Earnings: Volkswagen, TP ICAP

Economics: U.S. Jolts

(By Tom Westbrook; Editing by Edmund Klamann)