The pan-European STOXX 600 index fell 0.2%, after logging its best session in nearly two weeks on Monday.
Economically sensitive sectors such as miners, autos and energy stocks, among top gainers in the previous session, led declines on Tuesday.
Defensive plays including real estate rose 0.2%, the most among sectors, indicating a risk-off sentiment.
Investors now await inflation reading from the world's biggest economy on Wednesday after a surprisingly strong U.S. employment data dented hopes that the Fed might go easy in its series of rate hikes aimed at tackling surging inflation.
Among other stocks, Swiss duty-free retailer Dufry rose 2.7% as it said it saw strong sales momentum continue in July despite the soaring inflation.
(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Sriraj Kalluvila)