Fawad Razaqzada, market analyst at ThinkMarkets, warned of a "short-term correction as investors wake up to the risks facing the eurozone economy," despite the prospect of a weaker euro boosting exports.
"It is not necessarily about Austria," he said, pointing to "concerns that similar lockdown measures might be introduced to other parts of Europe."
Bourses in London, Paris and Frankfurt all fell, with travel sector firms especially hard hit as British Airways shed six per cent or around £400m off the carrier's market capitalization.
Oil prices tumbled and the benchmark Brent North Sea oil contract fell about three per cent to under $80 per barrel.
Back on Wall Street, both the Dow and S&P 500 retreated as investors largely shrugged off the House's approval of Biden's $1.8 trillion package to address climate change and bolster the US safety net, awaiting its passage in the Senate.
But the Nasdaq jumped 0.4 per cent to finish above 16,000 points for the first time as markets weighed the risk of economic weakness due to another Covid-19 wave.
"What the tech gains could be showing is the reemergence of growth concerns," said Briefing.com analyst Patrick O'Hare, alluding to the latest Covid-19 restrictions in Europe.
Earlier, Asian stock markets mostly closed higher, but Chinese e-commerce titan Alibaba plunged by more than 10 per cent after warning of a weaker outlook following China's crackdown on the tech sector and slowing growth in the world's second-biggest economy.
With Alibaba a big player on Hong Kong's Hang Seng Index, the market dropped more than one per cent. Other tech firms including Tencent and XD suffered smaller losses.
Other major Asian indices ended the week higher, with Tokyo up as the government announced plans to inject $490 billion into the Japanese economy to kickstart its recovery from the pandemic.