The pan-European STOXX 600 index fell 1.1% to hit a 10-day low, with economically sensitive sectors such as miners, banks <.SX7P>, automakers and oil and gas falling between 1.6% and 2.9%.
The Fed minutes showed that policymakers were doubtful of a quick economic rebound and may stick with aggressive stimulus measures for a much longer period, driving Wall Street indexes off their record highs.
A rise in U.S. weekly jobless claims to above 1 million also added to the downbeat sentiment.
Meanwhile in Europe, worries over a pick-up in coronavirus cases kept investors on edge. Britain recorded its second-highest daily total of new virus cases since June 21, while Germany has also seen cases accelerating in recent weeks.
"The impact of this (rise in COVID-19 cases) is not yet evident in the official economic data, but the high frequency figures show a clear flattening of activity - this will undoubtedly come through in the data," Derek Halpenny, head of research for global markets EMEA at MUFG, wrote in a note.
A preliminary survey of European purchasing managers is due to be released on Friday. The numbers are likely to show the pick-up in business activity stagnated in August after a rebound in July.
A full bounceback from the euro zone's deepest recession on record will take two years or more, a Reuters poll showed, with economists saying there is a high risk of the job recovery reversing by the end of 2020.
Among individual stocks, Chilean miner Antofagasta fell 5.6% after it posted a 22.4% plunge in first-half core earnings on lower copper sales, but said it would pay an interim dividend.
Payments processor Adyen NV, which has doubled in value in the past year, slipped 2.7% as it reported slower earnings growth.
Intercontinental Hotels Group rose 0.9% and France's Accor gained 2.3% after a French newspaper reported the hotel operators had examined a merger.
German real estate firm Tag Immobilien jumped 6.9% as it confirmed its guidance for 2020 and said raising it during the year was a possibility.
By Sruthi Shankar
